Uncertain car market looking up
Higher quality imports could help the industryELTON SMALLMAN
Waikato car dealers are still feeling the pinch of a slow economy, but there are signs the industry may get back on its feet again.
Dean Brindle, branch manager at Turners Auctions Hamilton, said the market is up and down and it is getting tough for some car dealers to cope.
"There's no real substance to it at the moment. It can be really slow one week and then pick up to be quite a strong week the following week," he said.
The uncertainty in the market has used car dealers struggling to keep their heads above water with some businesses having to close their doors, to the benefit of others.
"We have seen the odd one close down for different reasons but I suppose that probably contributes to helping the ones that are still going in a way, because there are still buyers out there," Mr Brindle said.
"I know it is still reasonably tough out there for a number of dealers and I think it just depends on what sort of stock you have on the day."
David Vinsen, from IMVIA (Imported Motor Vehicle Industry Association), said the market across the country was patchy but he saw positive signs ahead.
Fears of higher prices have been tossed aside as the market entered a new phase on the back of an increased supply out of Japan, a strong exchange rate and good consumer confidence.
"While not strong, [the economy] has continued to trickle along gradually improving.
"People seem to realise we have done comparatively well right through this GFC (global financial crisis).
"We haven't been anywhere near as affected as we might have been by the events in Europe."
Importers brought in 93,000 vehicles last year with an average vehicle age of 8 years.
"This year our prediction was for 70 per cent of that and that projection was predicated on what we thought would be on supply in Japan that would comply with the new emissions rule and also based on the exchange rate and the New Zealand economy."
Since then, Japan has introduced incentives to upgrade their fleet to environmentally friendly and fuel efficient vehicles after the Japanese opted for used cars in a struggling economy and after the earthquake. "The flow-on effect of that is there have been a lot more used vehicles released into the market place in Japan and it is pushing the price down and a lot of stuff we thought would be unaffordable is now within reach."
"Despite our original projections - we are very happy to be proved wrong - it looks as though we are going to import close to 75,000 used vehicles this year and that augurs well for the industry and for consumers but more importantly in the long term it augurs well for the improvement in the quality of the New Zealand fleet."
Mr Vinsen said there are 3.2 million cars on the roads in New Zealand with an average age of 13.1 years.
Around 145,000 cars with an average age of 18 years were sent to the scrap heap.
- © Fairfax NZ News
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