Wednesday, 28 June 2017

Passenger Car Sales In NZ, New vs Used

...and still they come. 

New Zealand is a relatively small car market. Manufacturing has never been undertaken for that reason, although there was assembly from kits (CKD). The inefficiency of that system lead to the government removing protection and cars were imported instead. By 1998, all assembly plants were closed.

In the late 1980's restrictions on used cars was eased. NZ cars are right hand drive as they are in Japan. Also the Japanese have a policy of removing older but still very good cars off the road to help the local car industry. Instead of them all being scrapped, better ones were bought and imported. That led to a tsunami of used car flooding the country.

Below is a chart showing how that is the case, data from MIA, NZ. The late 1980's it started and by 1990, more used than new were being sold. It nearly reached 70%! The 2014 figure is for nine months.


Year New Used Total % Used

1975 78,750 4,863 83,613 5.8%

1976 70,251 3,276 73,527 4.5%

1977 59,074 2,750 61,824 4.4%

1978 64,468 2,681 67,149 4.0%

1979 68,159 2,682 70,841 3.8%

1980 75,671 2,701 78,372 3.4%

1981 89,466 1,907 91,373 2.1%

1982 83,667 1,812 85,479 2.1%

1983 74,085 1,766 75,851 2.3%

1984 96,418 2,019 98,437 2.1%

1985 81,516 2,918 84,434 3.5%

1986 76,075 3,946 80,021 4.9%

1987 77,499 12,129 89,628 13.5%

1988 71,218 17,371 88,589 19.6%

1989 83,862 50,966 134,828 37.8%

1990 74,422 85,324 159,746 53.4%

1991 55,615 47,351 102,966 46.0%

1992 52,964 39,146 92,110 42.5%

1993 53,822 43,841 97,663 44.9%

1994 61,765 62,088 123,853 50.1%

1995 65,680 80,976 146,656 55.2%

1996 64,414 111,769 176,183 63.4%

1997 58,558 97,041 155,599 62.4%

1998 54,154 99,937 154,091 64.9%

1999 58,195 131,118 189,313 69.3%

2000 57,618 116,124 173,742 66.8%

2001 58,162 128,693 186,855 68.9%

2002 64,086 136,418 200,504 68.0%

2003 70,453 156,972 227,425 69.0%

2004 74,755 154,042 228,797 67.3%

2005 77,825 152,488 230,313 66.2%

2006 76,804 123,390 200,194 61.6%

2007 77,454 120,382 197,836 60.8%

2008 73,397 90,841 164,238 55.3%

2009 54,404 68,757 123,161 55.8%

2010 62,029 88,613 150,642 58.8%

2011 64,019 80,852 144,871 55.8%

2012 76,871 78,311 155,182 50.5%

2013 82,436 98,971 181,407 54.6%

2014 66,865 94,840 161,705 58.7%

So what effects has it had in NZ?

With not enough new cars to supply the used demand, that kept used prices high. They fell quickly with the deluge of second hand cars coming in. 

New car prices probably dropped a bit but not by much as new cars are still quite expensive here compared to say Australia. Occasionally very popular imports caused new car importers to realise there was a demand for such as a new car as well, so started bringing them in.

The age of the fleet grew with so many used cars arriving, leading the government to legislate to favour newer used cars imports. 

New car buyers dictate what cars are available used. Sometimes their tastes are different to used buyers. So models that would never sell new sometimes proved popular as second hand imports. For example, the Japanese have domestic only models. Some are small MPV models that come in to NZ and have met a need the new car market wasn't providing for. 

The gains of cheaper imports hasn't always been passed on to consumers as big importers made too much on them I feel. The price of new cars often seem to dictate what they sold for rather than the price to bring them in plus a modest margin. No one understands how to overcharge like a New Zealander, I'm sorry to say. Still, that is the way everything is here, so it is all relative. I think it is better now.

There are other aspects to used imports as well, arguments for and against from those with have a financial reason for an opinion. As one who doesn't have a vested interest one way or another, I feel they have been good for most New Zealanders. It has made good, reliable cars available at a better price on the used market.

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