Brexit on ARB, page-13

@marc
You wrote:
I too am very excited by the seemingly infinite possibilities that ARB's export market might offer. However, to assume that operations OS will replicating the domestic success, to any substantial degree, would seem to me, at best over confidence, at worst, a blind leap of faith. For whatever reason, good management, good luck, or perhaps a good dose of both, ARB has commandeered a breathtaking competitive position. Without this sort of moat OS, success will not be automatic. Further, to assume that the moat can be replicated OS (from my limited vantage point) would seem highly speculative.

I think you are right in everything you say. I would like add to your comment above.

ARB are a world leader in what they do. They really have no direct competition - there are some that try and do okay, but on the world stage there is no rival company that has the breadth and depth of quality products. Yes, in Australia they are leading their competitors, because of a range of reasons, but it is largely to do with the company has products that are superior in many ways to anything their competitors have. ARB has an impressive amount of R&D capability along with the machines, tool, know-how and staff to be able to design, develop, test and market products that are world class. Their competitors imitate (with varying degrees of partial-success), but never replicate.

As already pointed out by @travelightor the prices tend to be higher (but definitely not excessively so, and sometimes even cheaper) than similar products, it is because the products are superior and ARB don't build loss-leading products - they ensure that their investments make money. There have been R&D commitments in the past where they were developing new products, but they didn't end up going to market for various reasons shows that they are working smart. Also, they are willing to pour money into new product development (canopies, tanks, BP-51 shocks, etc) or improving existing products (summit protection range, air locker, etc) that produce a superior product that will add to their range of products over the long term.

Australia is a unique market and ARB will not replicate their Australian success overseas, exactly. But with world class products, selling more outside of a country that has 24m-odd people has alot of potential. They are not trying to set up a retail network, rather supplying to markets wholesale. The USA products are only just starting (barwork for popular models of pick-ups) to be more available and other parts of the world are also increasing steadily. I think the ARB team are making all the right moves and not trying to do it too quickly.

One issue is their production capacity. They have said that they have increased production in both plants (Melbourne and Thailand) and their is room for more productivity. But how much? I understand that their Thailand facility has expanded several times and is large. Not sure how much larger they can go. But am confident that ARB management are all over this and know exactly what they are doing.

They are (also) my second largest holding and I possibly should have more (and regret not buying more when I thought that $12 was high).