Luxury car sales show confidence
Sales of luxury cars in New Zealand have accelerated in 2013 to the point of overtaking the rate of growth in the rest of the passenger car and SUV markets, fuelled by falling domestic prices for high- end vehicles.
Some distributors have claimed a strengthening luxury market indicates business confidence is up and signals a positive trend for economic growth.
Motor Industry Association (MIA) figures show sales of luxury brand cars for the year ending June are up 18 per cent, and 35 per cent on 2011.
Sales of Audi, Mercedes Benz and BMW vehicles so far this year showed the strongest signs of growth, each up about 25 per cent from last year.
MIA chief executive David Crawford said the luxury sector was growing stronger than the rest of the passenger and SUV segment.
He said positive signs in luxury car sales tended to be a lead indicator for growing economic strength. "Traditionally, increased sales at the higher end of the market indicates the front end of an economic improvement."
Crawford said the strength of the New Zealand dollar in recent times, which in April was as high as US86c, had meant the prices were some of the most competitive in the world.
Armstrong Motor Group managing director Rick Armstrong said he had seen strong demand for luxury vehicles recently.
This could indicate improved business confidence because luxury cars typically were more expensive, he said.
"Indicatively our customers seem to be quite relaxed about spending more money on vehicles and there is a certain sector of cars that are selling quite strongly.
"The high-end luxury SUVs and also some really exotic type sports cars as well."
The main driver of the increased demand, however, was the increasingly competitive price of luxury cars, he said.
According to the Armstrong Motor Group website, Audi Q5s - an SUV model - were listed for up to $124,900. "What's really driven it is there have been significant price reductions across the board in the luxury car sector.
"I guess it's a reflection that the New Zealand dollar's been stronger for some period of time, but it's also manufacturers have reduced pricing."
According to Statistics New Zealand, the price of new cars in New Zealand has dropped 2.7 per cent.
Increased demand for luxury cars, however, has been met by unprecedented climbs in the price of petrol over the past month.
A fall in the New Zealand dollar had contributed to an 11c rise in the price of petrol.
Last week crude oil surged to its highest level in more than a year.
Armstrong, however, said he expected luxury car sales to continue to be strong for the rest of the year.