Analysis

– Dieter Adam, NZMEA We are coming towards the close of another year, and it’s time to reflect on how it has gone for our manufacturers. I will also take this opportunity to give some updates on changes at the NZMEA in the last year and things we hope to achieve into the next year. Much of 2015 can be characterised with the usual volatility, both in markets and the exchange rate, which unfortunately seems to be all too normal in the current global environment. But we have also had a lot of bright spots in comparison to some recent years, notably the shift in the exchange rate, starting its long awaited correction from very high levels. After reaching record highs in the previous year, seeing the long awaited downward trend in our currency take shape through this year came as a relief. Exporters and import-competing manufacturers have felt the pressure of an overvalued currency for a number of years, peaking against the US$ in July 2014, but our dollar has steadily dropped since then and now lies at a far more reasonable level. Similarly for our biggest trading partner, Australia, our currency reached record highs in January of 2015, but again this has fallen back. This correction was helped along by the RBNZ cutting the OCR, better aligning our interest rates with those lower rates around the world. There are also suggestions we may see more cuts in the coming year. This long-awaited downward trend of the NZ$ will help manufacturers be competitive, both in global markets and when competing with imports, as well as helping them claw back some margins – we hope this will help put manufacturers in a better position to invest in their businesses and innovation in the coming year, something that has not been […]

– Zhao Jizheng, Siemens PLM Software The automotive industry faces stricter fuel economy and emissions standards around the world, with varying deadlines for achievement through 2025. These fuel economy and emissions standards, along with improvements to safety, growth of intelligent mobility and customer desires for integrating their lifestyle into the vehicle, have automotive original equipment manufacturers (OEMs) relying more on electronics and embedded software to keep up with an ever growing industry. These trends are causing a fundamental change in vehicle technologies which requires more innovation from automakers and suppliers in alternative propulsion, lighter vehicles and energy optimization. A 2014 Center for Automotive Research report, entitled Advanced Information Technology Solutions: An Engine of Innovation, summarizes this sentiment by saying: “The industry is transitioning from a primarily mechanical-based industry to a software-based industry. In fact, some would argue that the industry is transitioning from a transportation focus to a technology focus.” Adopting these new technologies and product innovations drives more interaction across vehicle systems and components. As the complexity of vehicle systems increases with new types of technology, these innovations demand a fundamental increase in the sophistication of automotive systems. Suppliers must integrate mechanical, electronics and software capabilities as well as system development knowledge to deliver more complex systems. That, coupled with the global growth of the industry, increases the pressure on automotive suppliers to expand their own engineering, manufacturing and supply chain networks around the world, which adds to program and operational complexity. Staying in Front In Asia, suppliers are facing pressure on two fronts – the need to respond to their local market and OEM quickly, because Asia continues to be the growth engine for the automotive industry, and, as the part of the supply chain, they need to collaborate with global OEMs more efficiently and contribute more actively […]

Kiwi Ingenuity should be celebrated as much and even more than the glorious achievements of the All Blacks on the Rugby field. By Joel Leonard New Zealand is more than a haven for Hobbits, champion rugby teams, picturesque scenery, and adventurous vacations. Also a haven for Kiwi-Ingenuity! Kiwi Ingenuity has evolved to become the real national treasure for New Zealand. Located over 900 away from Australia, New Zealanders, or Kiwis have had to become very resourceful in order to cope with their remoteness and as a result have been forced to invent their own solutions and have been able to maximise their creativity, otherwise known as Kiwi-Ingenuity. Have you ever heard about Jetboats? From Wikipedia- A jetboat is a boat propelled by a jet of water ejected from the back of the craft. Unlike a powerboat or motorboat that uses a propeller in the water below or behind the boat, a jetboat draws the water from under the boat into a pump inside the boat, then expels it through a nozzle at the stern. Jetboats were originally designed by Sir William Hamilton (who developed a waterjet in 1954) for operation in the fast-flowing and shallow rivers of New Zealand, specifically to overcome the problem of propellers striking rocks in such waters. Previous attempts at waterjet propulsion had very short lifetimes, generally due to the inefficient design of the units and the fact that they offered few advantages over conventional propellers. Unlike these previous waterjet developments, such as Campini’s and the Hanley Hydrojet, Hamilton had a specific need for a propulsion system to operate in very-shallow water, and the waterjet proved to be the ideal solution. From this, the popularity of the jet unit and jetboat increased rapidly. Through further developments, it was found the waterjet offered several other advantages over […]

The Research and Development Survey released last week by Statistics New Zealand showed some good news but falling R&D expenditure as a proportion of GDP is of concern – a broader R&D strategy is needed from Government to improve this, say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive John Walley says, “Total R&D as a percentage of GDP fell from 1.25% in 2012, to 1.13% in 2014. To put this in perspective, the OECD average increased from 2.33% in 2012, to 2.4% in 2014. On the positive side total business R&D increased $53m (4%) from 2012 to 2014, however Government R&D expenditure fell $40m (7%) in the same time period.” “Investing less than comparable countries in R&D as a percentage of GDP is a negative leading indicator – R&D drives complexity, capability and innovation in our economy, all things we need to play a competitive game in the future.” “In a modern economy products and services increasingly rely on R&D and intellectual property to continually improve and innovate, this is particularly true for the high tech and elaborate sectors.” “Manufacturing plays a disproportionately important part in our overall R&D expenditure (contributing 20% of total R&D); although manufacturing R&D spending fell $14m (3%) between 2012 and 2014. In recent years many have deferred investment of out necessity; due to lower returns from an unfavourable policy environment driving an overvalued currency, and global market conditions – a necessary deferral but it does risk future competitiveness.” “A broader, more inclusive R&D strategy from Government, such as R&D tax credits would better encourage more businesses to invest more in R&D – with positive flow on effects to growth, incomes and employment. Such policies to encourage R&D are common place around the world, and we need to ensure New Zealand has […]