Buyers returning to new car market
Consumers, not just businesses, are starting to buy more vehicles as the strong New Zealand dollar and easing supply restrictions combine to make it the cheapest time so far to buy a new car.
But rises in interest rates and a subsequent drop in the dollar could put the brakes on new vehicle sales' golden run.
Motor Industry Association figures showed 10,528 new vehicles were registered in January, the highest for the month since records began in 1975. This followed from the more than 113,000 new vehicles registered last year, the highest number in nearly 30 years.
MIA chief executive David Crawford said 2014 had got off to a "rip-roaring start", as January figures for new passenger, commercial and total vehicles were all records.
"It's the fourth month in a row that records have been the highest since records began, fuelled by a strong New Zealand dollar and a strong economy," he said.
Total new-vehicle registrations in January were up 13.2 per cent on the same month last year. New commercial vehicle registrations were up 17.1 per cent from January, 2013, and new passenger vehicle sales up 12.3 per cent.
Crawford said commercial vehicles had been buoyed by construction activity in both Christchurch and Auckland.
"A lot of our vehicles, whether they're passenger or commercials, are bought by businesses. But we're starting to see an increase in consumers buying what we call the ‘private buys'."
This was because the economy had been strengthening, and just as businesses last year had confidence to purchase "big ticket" items, consumers were catching up.
Further to this, low interest rates and the strong New Zealand dollar made the price of a new vehicle competitive against the price of a near-new second-hand vehicle.
"Consumers have held on to their vehicles for quite a long time - since the global financial crisis - and a lot of people are now starting to replace those vehicles."
Businesses had bought heavily in 2013 following supply restrictions for commercial vehicles caused by the 2011 floods in Thailand and tsunami in Japan. But private consumers were only now catching up, he said.
Families were buying more commercial style vehicles as well, with a third of the 291 Nissan Navara utes sold during January, the second most popular model for the month, purchased privately. The Ford Ranger was the most popular while the usually dominant Toyota Hilux fell to third.
Crawford said utes were starting to be thought of as large sports utility vehicles, which represented a quarter of all new vehicles sold during January.
"Inside they're becoming increasingly car-like, so they're becoming more of a ubiquitous family vehicle for doing heavy-duty stuff as well as runaround stuff."
New vehicle registrations were expected to continue the record-breaking trend for a while, but Crawford said a rise in interest rates, expected at next month's Reserve Bank Monetary Policy Statement, could see buying behaviour change.