New car sales tread a steadily improving path

New car sales are up about 13 per cent on the monthly volumes a year ago as the industry slowly recovers from the recession.

Motor Industry Association chief executive Perry Kerr said figures for February showed the sector was on a steadily improving path, and better results were expected this year.

However, new car sales volumes remained well down on a few years ago, and it would take some years to return to previous levels, he said. Sales growth of about 5 per cent a year was expected.

"It will take the industry four or five years to get back to where it was. We see no magic bullet for the new car industry. There is nothing to say there will be a massive increase in sales."

February new car registrations were 13.3 per cent above levels in the same month last year. Commercial vehicle registrations were up 7.4 per cent.

New Zealand Transport Agency figures show new car registrations were down 23 per cent from January to 4302 cars in February. But Mr Kerr said there was typically a dip in sales after January, because February was a shorter month with 28 days.

Market leader Toyota continued to top the pack in February, but its nearly 20 per cent share of the new car market in calendar 2009 was whittled down to about 13 per cent in February, after bad publicity about car recalls in the United States.

Toyota sold almost 4700 Corollas in 2009, well ahead of the second best selling car, the Holden Commodore. But in February the Corolla was down to fourth place at 167 cars, behind Suzuki's Swift in top place, with 234.

Steve Prangnell, Toyota New Zealand's general manager of sales and operations, said sales were about at the expected level and he did not think they were affected by safety recalls.

Part of the market for Corollas was for business fleets, and many companies were not in the market at this time of year. Also, the Government was not buying many vehicles now while a new procurement process was being established.

Toyota recently carried out one of the biggest global car recalls ever, when 8.5 million late model Avensis and Prius models were recalled after safety scares in the US.

In 2009 for the total New Zealand market, 54,404 new cars were sold, down about 19,000 on the previous year as the sector was hit by the recession. There were fewer private buyers after many older people lost money in finance company collapses and others feared for their jobs in the recession.

The slump in new car sales meant there was now a shortage of late model "New Zealand new" cars for sale. That meant prices for "young" used cars, up to two years old, had gone up between $2000 and $4000 in the last six months, Mr Kerr said.

"The trade-up gap [between late models and new models] has got less, which will encourage more people into the market [for a new car]."

Imported used cars less than two years old were not plugging the gap because dealers could not make a sufficient profit on them.

The overall new car market was still weak as private buyers were still shying away from signing up, but companies were replacing fleet cars.

Typically, up to 70 per cent of new car sales are company fleet vehicles, and cars are replaced after three years or so.

"In January we still had not seen the private buyers come back into the market," Mr Kerr said.

- © Fairfax NZ News