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November 30, 2005

NEW ZEALAND: New vehicle importers dismiss ‘green’ government buyer incentives

Cash incentives and penalties to change vehicle buyer behaviour, as suggested by the NZ Council for Sustainable Development are unnecessary, according to the Motor Industry Association (MIA), which represents new vehicle importers.

Cash incentives and penalties to change vehicle buyer behaviour, as suggested by the NZ Council for Sustainable Development, are unnecessary, according to the Motor Industry Association (MIA), which represents new vehicle importers.

“The government must resist any temptation to pick winners and losers by offering incentives or imposing penalties”, said MIA CEO Perry Kerr. “This would only lead to short term distortion of the market which would cause more long term problems and ultimately cost all vehicle owners.”

MIA fuel consumption data showed that New Zealand businesses are purchasing more fuel efficient new cars than private new car purchasers. The monthly average fuel consumption for all business cars purchased has dropped from a weighted average high of 11 litres per 100kilometres in May to 9.9litres per 100km in October – a reduction of 10% in just 6 months. (Over the same period the private new car buyers’ figure reduced from 10.5l to 10.1l per 100km.)

Kerr said that market forces ensure that business and private car purchasers make common sense decisions without the need for cash incentives or penalties.

The new car industry openly acknowledges that it has a vital role to play in ensuring that vehicle emissions and fuel consumption are minimised. Globally, car manufacturers are investing billions in producing cars with much lower emissions, which use less fuel and are safer than earlier models. These vehicles are available for sale in New Zealand today.

“From January 2006 we will take another major step, in that, at last, our diesel will be up to accepted international specifications, meaning that the latest and cleanest diesel vehicles with advanced particulate filters can be sold,” noted Kerr.

He added that 99.5% of all new petrol cars available in the country now are able to use a 5% ethanol blend and that from January next year 80% of all new petrol cars could run on a 10% ethanol blend.

“The failure of government to do anything about the increasing age of used imported vehicles entering our vehicle fleet is now the most serious issue standing in the way of reducing New Zealand’s fuel consumption and emission levels,” said Kerr.

“When it’s common knowledge that a 20 year old vehicle (when new) produces at least 30 times as many harmful emissions as an equivalent new one, the fact that we’re importing thousands of vehicles every month that are already half that age, and with considerable wear and tear, means that we’re buying ourselves an enormous problem for the future.

“The new car industry is right behind moves to introduce ethanol blends to New Zealand,” said Kerr, “but such initiatives are like blowing into a Wellington southerly [wind] as long as we do nothing about the increasing age of the obsolete vehicles that continue to cross our wharves in their thousands.”

New Zealand has imported used vehicles in virtually unrestricted supply since the late 1980s. At one point the number of used car imports annually was more than double new car shipments.

New vehicle importers have long contended the policy is one of unforseen consequences. Originally intended to give ‘Kiwis’ the opportunity to own cheaper and newer cars, it has instead resulted in an unitended ageing of the country’s motor vehicle fleet overall. This trend became apparent as long ago as the early 1990s when it was first highlighted by the local Toyota unit. 

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