April 2005
Overview
New Zealand as a nation is passionate about motor vehicles. The country has one of the highest per capita rates of vehicle ownership in the world. Historically, the high cost of new vehicles in New Zealand meant cars remained in use for many years. This has led to a culture of backyard mechanics, where many people have learnt mechanical skills in order to keep older cars on the road. This, combined with the popularity of motor sport, has led to the development of outstanding and innovative engineering skills in this country.
The automotive engineering sector grew to support domestic car manufacturing but the economic reforms of the 1980s and 1990s had an enormous impact on the sector. The 1990s saw the closure of New Zealand manufacturing operations by major Japanese car-makers such as Nissan, Honda, Mazda, Mitsubishi and Toyota and that in turn had an impact on many companies associated with the new car-building industry. At the same time, the number of imported used vehicles has risen dramatically.
While this restructuring led to the demise of some segments of the industry, it also resulted in new opportunities. Many companies have adapted successfully to the new challenges and a number are finding success in the global market within specialist niches, using smart design and technology. New Zealand is a major exporter of alloy wheels and other exports include pick-up truck liners, roof rack systems, electric fuel pumps, engine parts, cylinder heads, automotive glass and specialised seating for buses and racing cars.
The New Zealand Automotive Component Manufacturing industry is characterised by diverse innovative enterprises that have adapted and survived over many years, are strategically astute, committed to quality products and customer service, and generally export-focused and optimistic about their growth prospects.
Major markets
Exports far exceed domestic sales, reflecting the limited size of the market here and New Zealand's success in selling to multinationals overseas. Exports have grown dramatically over recent years, notably to the USA. Australia is another major market with potential for further growth. Altogether, New Zealand automotive engineering companies export to more than 100 countries, including South Africa, Japan, Germany, Denmark, UK, Canada and the Pacific Islands.
Industry structure
The automotive sector in New Zealand is made up of about 130 companies most of which are located in the Auckland, Waikato-Bay of Plenty and Canterbury regions. New Zealand manufacturers are very diverse in size, core competencies, product lines, research, markets, distribution channels and location. The industry's product range encompasses tyres, windscreens, wheels, engine components, electronic items and a wide range of vehicle accessories.
At the smaller end of the market are companies targeting specialist niche markets, often linked to high performance vehicles. At the top end of the industry are large overseas-owned companies competing successfully in a range of international markets. A number of the smaller and mid-range companies are also involved in areas of manufacturing not necessarily related to automotive components, such as military, marine, aviation, industrial and domestic hardware.
New Zealand's core capability lies in the original equipment and spare parts area, accounting for 68% of the total sector. However, companies operating in the other sectors also enjoy considerable export success.
A growing number of companies are successfully targeting the after-market sector. These companies, tend to be small, flexible and readily able to adapt to the fast-changing conditions. Entrepreneurial companies such as Proform Plastics, which exports pick-up truck bed liners, Fuelflow systems (electric fuel pumps) Hubco Industries (roof rack systems) and Airplex Industries (acrylic accessories) have successfully specialised and formed alliances with key offshore companies which has led to export business in the Middle East, USA and South Africa.
Innovation
High rates of car ownership and a fixation with technology, as well as market changes such as the demise of the New Zealand assembly industry and the freeing up of other markets, has led to a culture of innovation and technical expertise in this country.
For example, one New Zealand manufacturer, Ion Ltd, has succeeded in identifying a niche market by supplying Ford factories in the USA with alloy wheels which are fitted to the top-selling Taurus, Explorer and Mazda B series vehicles. The company is arguably one of New Zealand's finest examples of the industrial application of advanced research and development.
Designline Ltd, based in the South Island, is an example of an innovative company which identified a niche in manufacturing specialist hybrid electric buses, and now has a commercially viable vehicle that has been extensively tested in both Australia and New Zealand. The Tokyo Electric Power Company has just signed an agreement for the supply of a trial electric bus to Japan. Substantial export orders for the superb design are expected from Japan and possibly China.
Racetech Seats was established in 1992 and initially manufactured racing seats for off-road motorsport, mainly rallying and circuit racing. Since then, the company has broadened its technical capabilities to on-road applications as well. Race-Tech now manufactures seats for high-performance road vehicles, factory-built Dodge Viper race cars, jet sprint boats, pleasure boats and motorsport teams around the world. The company has further diversified to encompass the New Zealand military and extreme entertainment rides.
Dunedin manufacturing company DC Ross manufactures fine blank pressings and exports to car manufacturers in Australia, the USA and China.
Hamal Industries diversified from manufacturing wiring looms into electronics and specialised Jaguar battery clamps, while seat-maker Trimtech developed a niche in general transport seating and now supplies customers in Australia.
Hella New Zealand designs and manufactures ultra-durable Marker and Signal lamps for the Commercial Transport Sector. These products are Light Emitting Diode-based, rather than incandescent bulb, and 85% of production is exported to Australia, Europe, the US and Canada.
Airplex Industries specialise in automotive acrylic accessories such as headlight guards, bonnet protectors, and weather shields and exports them to more than 30 countries. The company's competitive advantage comes from adaptability, flexibility, and product design and innovation. The company has developed a Middle Eastern-style design for its headlight covers specifically for markets in that area of the world.
New Zealand also boasts a thriving hand-built car sector, with dedicated enthusiasts across the country building classic car replicas, restoring classic cars or combining the best of old and new to produce their own creations.
Design, quality and innovation are vital elements in the industry's success. Manufacturers have focused intensively on creative design and a commitment to high quality products. They have also proven agile in responding to customers' requirements, and to new market opportunities.
Quotes
"The ability to see outside the box is a lot easier if you haven't been shown the confines of the box in the first place. 'Not Possible' was a foreign concept to Britten.'"
- Journalist Shaun Craill on New Zealander John Britten, inventor of the world famous Britten motorcycle.
Industry contacts
New Zealand Trade and Enterprise
Ken Gardiner
tel +64 4 910 4300
fax +64 4 910 4309
ken.gardiner@nzte.govt.nz
Airplex Industries
tel +64 9 276 9826
fax +64 9 276 9836
info@airplex.co.nz
D C Ross
Bob Houliston
General Manager
Tel + 64 3 4788060
Fax +64 3 4788070
www.dcross.co.nz
Designline Ltd
John Turton
Managing Director
tel +64 3 308 4811
fax +64 3 308 4702
Turton@designline.co.nz
www.designline.co.nz
Fuelflow systems
Helen Corder
Manager
tel +64 7 863 8101
fax +64 7 863 8523
fuelflow@xtra.co.nz
www.fuelflow.co.nz
Hamal Industries
Martin Morrissey
Design Manager
tel +64 3 366 6039
fax +64 3 379 0586
sales@hamal.co.nz
www.hamal.co.nz
Ion Ltd
Neil Campbell
tel +64 9 279 7603
fax +64 9 279 7660
Neilc@amtnz.com
Proform Plastics
Ferris Townshend
Director Sales & Marketing
tel +64 7 847 9033
fax +64 7 847 9034
info@proform.co.nz
www.pickupbedliners.com
Racetech
David Black
Managing Director
tel +64 4 939 0552
fax +64 4 939 0553
sales@racetech.co.nz
www.racetechseats.com
Trimtech
Andre du Plessis
General Manager
tel +64 9 262 3380
fax +64 9 262 3291
service@trimtech.co.nz
www.trimtech.co.nz
