Stellar car sales on back of high kiwi
Annual car sales are on track to overtake 200,000 for the first time in nearly a decade, as used imports accelerate on a strengthening New Zealand dollar.
Economic research firm Infometrics yesterday heralded a "sensational March quarter for car dealers", with both new and used vehicle sales continuing to shift up.
In total 22,099 vehicles were sold during March, comprising 11,235 new vehicles and the remainder used imports.
But the 10,864 used vehicles sold in the month was 35 per cent higher than in the same month last year, according to the Motor Trade Association.
Infometrics said sales growth was particularly rapid for imported used cars, which was at its highest level since July 2008.
Japanese imports had slowed because of the earthquake in Japan in 2011, new emissions regulations in New Zealand and increased competition.
The new emissions standards were enforced from January 2012, and effectively meant most Japanese cars made before 2005 could not be imported.
Infometrics said households were becoming increasingly willing to buy vehicles as economic activity continued to surge.
"Used import prices have been particularly favourable, as the New Zealand dollar rose 11 per cent against the yen over the year to March. Furthermore, the pool of affordable vehicles that comply with new emissions standards continues to grow."
The sharp depreciation in the yen had kept car prices subdued, it said.
Motor Industry Association chief executive David Crawford said new vehicle registrations were also at levels last seen in the early 1980s. "New Zealanders are continuing to take advantage of our strong dollar, backed by confidence in the economy, to replace their vehicles."
Recently retired Honda New Zealand managing director Graeme Seymour, who worked for the company for 34 years, said when he started a car was worth about 90 weeks of a salary but, today, it was less than 30 weeks.
"Of course, there was a period where importing Japanese used cars got hard there for a while because the yen was really strong against the New Zealand dollar.
"It is starting to swing back the other way now, the New Zealand dollar is strengthening . . . we can offer much more value."
The New Zealand dollar recently peaked at 88.82 yen, its highest point since about mid-2007. Over that period annual used imports from Japan dropped as low as 64,702 in 2009, rising to 93,102 last year.
Infometrics said total car sales would close in on 200,000 this year, up from 191,249 in the year to March this year.
Car sales last bumped the 200,000 mark in 2006, following a historical high of 230,313 in the previous year.
MTA spokesman Ian Stronach said sales continued to ramp up. "The rate of sales growth seems to be picking up even further, with the overall segment still at the head of the pack in terms of economic performance."
He said March was traditionally strong for vehicle sales, as the financial year ended for many businesses, but if current levels were maintained, it would prove another strong year of growth for the vehicle industry.
Infometrics said it expected car sales would continue to pick up over the coming months.