The weakening New Zealand dollar means that “even older and shoddier” imported used vehicles are going to be pouring across the wharves and is further bad news for the age, safety and environmental effects of the country’s vehicle fleet in the short term, according to the Motor Industry Association (MIA), which represents new vehicle importers.
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“Even with a historically high dollar, an oversupply of used imports was already choking the bottom end of the used car market in New Zealand, and the dollar’s now fallen almost 20% against the yen in the last four months,” said MIA CEO Perry Kerr.
“New Zealand importers are losing purchasing power in Japan, and this is compounded by the boom in demand from Russia. Even the Independent Motor Vehicle Dealers’ Association (the used vehicle importers’ association) is admitting that its members will be seeking older and shoddier vehicles for the same money and foisting them onto hapless consumers in New Zealand.”
Last year, even under a high dollar, used imports landed in New Zealand reached a record average of over eight years old. 78% (21,767 vehicles) of used four wheel drives (SUVs) entering the country were nine years of age or older. The only emissions equipment required of these vehicles is that which applied at the date of manufacture.
“New Zealand’s used vehicle entry system is so third world that there’s no check as to whether this equipment is still working, or in fact still in place,” said Kerr.
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By GlobalData“There’s no doubt that used importers are now caught in a squeeze between the increasing cost of older used imports and the increasing supply and better value of NZ-new used cars, “Kerr claimed.
“The time’s now right for the government to take some positive action to divert consumers towards better value, more environmentally friendly, longer-lasting vehicles by imposing a seven year rolling age ban on used imports.”
Separately, the Dominion Post daily reported that the country’s used-car dealers had confirmed they would struggle to bring in vehicles at reasonable prices as the Kiwi dollar continues to fall and Russians buy cars that New Zealanders want.
The paper noted that the dollar has fallen more than 6% this month and 12% this year against the US dollar.
As the dollar falls against the Japanese yen, the price of imported cars – used an new – rises. It has fallen to JPY72 from JPY87 in early December, a fall of 17%, the report added.
The most likely scenario is that Kiwis will not want to pay more for Japanese cars, so dealers will instead bring in vehicles with more kilometres on the odometer, the DominionPost said.
“The exchange rate slipping means the purchasing power of the New Zealand public, and therefore buying dealers, is limited. The thing is people will still bring in $10,000 cars but buy older and older vehicles,” Independent Motor Vehicle Dealers Association chief executive David Vinsen told the paper.
The presence of Russian importers had been increasingly felt in the Japanese market, where New Zealanders had once been leaders in terms of exploiting opportunities to buy used cars, the report said, adding that New Zealand had been a pioneer and the top country importing from Japan, but had fallen to third or fourth on that list behind Russia and the United Arab Emirates.
“Russia has gone from something around 3,500 (imports) last January for the month to 37,500 for January this year,” Vinsen told the paper.
“On an annualised basis, we import around 150,000. I have a feeling it is going to be less this year,” he said, according to the DominionPost.
