Aussies gear up to snap up used cars

ROB STOCK
Last updated 05:00 03/08/2014

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There was a time when New Zealand ruled the roost when it came to importing Japanese used cars.

Thanks to its early dismantling of tariff barriers in the neo-economic push of the 1990s, a massive trade in used Japanese cars to New Zealand began and Kiwi consumers lapped up the bargains on offer.

That lasted until 2004, when Russia made its debut at the Japanese used-car auctions, sparking what has now become a competitive market, with New Zealand among the top six buyer countries. The market tends to attract countries like Japan where drivers stick to the left-hand side of the road.

Now the competitor that New Zealand used-car importers fear the most is Australia, although it has yet to show up on the chart of those snapping up the cars.

It is being tipped to enter the market in the next few years, joining Russia, Myanmar, United Arab Emirates, New Zealand, Chile and South Africa.

Russia is the powerhouse now, although its imports spike and then fall away each year in a seasonal cycle as some of its major ports freeze over, said Turners Auctions chief executive Todd Hunter.

But Australia was likely to also join in as its domestic car manufacture was vanishing with the likes of Ford, Toyota and Holden moving production overseas.

"It's all been about protecting Holden, Toyota and Ford, who have all now decided they are pulling out, so the expectation from people here is that in two to three years time, the framework of tariffs will probably be removed, which will open up the used-vehicle export market from Japan to Australia," Hunter said.

The end result will be more competition to buy Japanese used cars and likely higher prices and more limited supply to New Zealand, Hunter believes.

The Motor Trade Association's Tony Everett said it was likely the Myanmar entry into the market two and a half years ago would be followed by others. There was also a growing presence by existing buyers such as Pakistan.

Everett expects Australia to make importing used cars more cost effective, but he thinks there may be limiting factors on Australia's impact on the Japanese auctions.

Australians pay less for their new cars than New Zealanders, Everett said, so the gap between the new and used price may not provide the same impetus to import used ones.

Regardless of rising competition, the motoring tastes of the Japanese are having a profound impact on car fleets elsewhere, he said. The top eight vehicles coming in this year are all small cars and a good proportion of them are hybrids.

"Our tastes will have to follow theirs," he said.

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Currently New Zealand used-car buyers are facing a glut which they're taking advantage of.

The strength of the New Zealand dollar has helped drive a surge in imports of used Japanese cars and also a spike in new-vehicle imports and sales. The higher number of new sales, the more used cars end up on the market. That makes for a buyers' market, said Hunter, with sellers being forced to cut prices to "meet the market".

"The used import market is flying," Everett said.

Compounding the problem for sellers is that we're not seeing scrapping at the same rate as cars coming in, he said. " The car fleet is growing."

- Sunday Star Times

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