NZ new vehicle market slowing after four years of record highs

Thursday 3rd May 2018

Growth in sales of new vehicles in New Zealand is slowing after four straight years of record highs.

Some 10,423 new vehicles were registered in April, down 2 percent from the 10,635 vehicles registered in April last year, according to Motor Industry Association data. Registrations of passenger and SUV vehicles fell 2.1 percent to 6,848, while commercial vehicle registrations slipped 1.8 percent to 3,575, marking the first time since December 2009 that both categories posted declines.

Motor vehicle registrations in the first four months of this year are up just 1.4 percent compared to the same period last year, suggesting vehicle sales may not hit a new record this year after strong growth over the past four years aided by competitive pricing, low interest rates, and record migration.

"The growth this year is pretty minimal, it’s pretty slim," said MIA chief executive David Crawford. "We are still at historically high levels but the growth in the market is probably going to be a bit slimmer this year compared to the last five years."

Crawford said the new vehicle market is likely to be "relatively stable" and may not continue its record-breaking run.

Some economic indicators such as net immigration were weaker, although if tourism continues to run strong sales of rental vehicles may bolster the figures over spring, he said.

An estimated 65 percent of new vehicles are bought by businesses, typically on 3-year leases and that dynamic didn't appear to be changing, he said.

Competitive pricing had drawn more private buyers into the new vehicle market over the past three years who had traditionally bought one-owner vehicles and that dynamic appeared to have stabilised, he said.

Crawford noted that there may have been some delay in the way sales of new vehicles were recorded in April due to a change in the way that Toyota, the market leader, was recording its figures. As part of a new "buyer remorse" clause, Toyota allows buyers to return a car within seven days if they feel they've made the wrong choice, and the car isn't counted as a sale until that period has passed, creating an artificial delay.

(BusinessDesk)

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