Clean car ambition timeframes challenged

New vehicle distributors agree the CO2 count has to fall, but say the pace of proposed change will be problematic.

NZ-new EV availability is ramping up, with this BMW iX (above) among confirmed 2021 entries, but the industry points out that left-hand-drive markets are prioritised, which hurts planning for this country.

NEW vehicle importers support a clean car standard but believe the mooted deadline of 2025 is impossible to achieve and have labelled electric vehicle uptake forecasting as a fantasy.

The Motor Industry Association, which speaks for new car distributors and has more than 44 members covering 81 different marques, is more partial to a 2028 deadline, as suggested in a Climate Change Commission report.

However, it is also particularly scathing of the commission’s considerations about the pace of EV uptake in New Zealand, saying its modelling “enters the realm of fantasy and wishful thinking.”

This is the MIA’s biggest concern, though it is also questioning the agency’s projections about when EVs will achieve price-parity with conventional internal combustion engine vehicles, saying that forecast is also seriously awry. Predictions of low emission vehicles also run ahead of what the MIA believes is possible.

“We consider that the commission’s target of 50 percent of vehicle imports to be electric by 2027 are overly optimistic, as are the projections for price parity.”

It highlights that the world’s EV makers are primarily concerned with meeting demands in markets where hard-and-fast deadlines for reduced emissions and ICE car availability has been established. It also points out that with the exception of the United Kingdom, which plans to ban new ICE cars from 2030, these are predominantly left-hand-drive markets, so as result production for right-hand-drive countries is limited at best.

The Association also believes the commission undervalues the role of carbon sinks, synthetic fuels – that could keep internal combustion engine (ICE) vehicles in circulation - and hydrogen technologies.

The latest comment comes after a number of high-profile local distributors, including Toyota New Zealand and European Motor Distributors – which holds rights to all brands held by Volkswagen Group, an electric vehicle production juggernaut likely to overtake Tesla next year (yet is unable to begin supply to NZ until 2023) - have called on the Government for a feebate scheme to sit alongside its clean car legislation, fearing that without it new EVs will struggle to see similar demand.

The MIA’s criticisms and alternate proposals are contained in a comprehensive report responding to the Government having announced, in January, an emissions standard which, if approved, will take effect from next year and also the commission’s subsequent draft report lending opinion about what it believes New Zealand must do.

The deadline for submissions about these matters is today.

The Government’s standard will require new and used car importers to meet incrementally lower emissions targets, falling to 105 grams of CO2 per kilometre average by 2025, from a present average of 171g/km.

The commission has subsequently recommended the Government deploy an end-date for petrol and diesel internal combustion cars, proposing 2032 as appropriate.

In a covering letter to the MIA’s submission, chief executive David Crawford says new vehicle importers supports need for cleaner vehicles, but says the timeline for a lower CO2 average is too rushed.

“Unfortunately the Government’s timeline of 2025 is impossible to reach with resulting penalties becoming a financial impost against all new vehicles including low emission vehicles.”

“Additionally, the transport policies in the draft report focus on vehicles entering the fleet which is only a small portion of the in-service fleet. We need policies to focus on not just only those entering the fleet, but also to target existing vehicles. This will garner a faster rate of emission reductions than just focusing on vehicles as they enter the fleet.”

Additionally, the transport policies in the draft report focus on vehicles entering the fleet which is only a small portion of the in-service fleet, he says. 

“We need policies to focus on not just only those entering the fleet, but also to target existing vehicles. This will garner a faster rate of emission reductions than just focusing on vehicles as they enter the fleet.”

In an executive summary, the MIA says the commission should have been “more technology agnostic, and not favour one technology over another, but enable the transport industry to develop innovative solutions” to meet reduced CO2 targets.

Crawford says the commission’s thought that technological breakthroughs will be crucial to enable the agricultural sector to reduce its greenhouse gas emissions does not give consideration to the potential for new technological breakthroughs for the transport sector.

David Crawford.

“The MIA believes the (commission’s) draft advice report needs to give greater weight to the role that synthetic fuels (including e-fuels) could play in reducing emissions from the current ICE fleet.

“ ….we also consider the report has underplayed the potential for hydrogen propulsion, not only for heavy vehicles but also light, in addition to battery technology. There is also no evaluation of the role e-motorcycles/scooters can play in reducing emissions.”

It believes discussion of ICE bans is premature if synthetic fuel can be produced. It suggests the country should invest in the production of such ‘e-fuels’  “and we have an opportunity to do so.

“For example, once the extension to the Tiwai Point aluminium smelter contract has run its term in 2024 then that electricity could be utilised to make e-fuel to lower emissions of the entire NZ fleet of light and heavy vehicles.”

It also moots the use of wind turbines to assist in the creation of hydrogen, a process which is already signed off for trial, and is excited by the development of second generation biofuels which are sourced from various bio-stock (wood, for one) to make a crude bio-oil from which petrol and diesel can be produced.

In a recent commentary, Crawford noted “these second generation biofuels are known as ‘drop-in’ fuels which are 100 percent compatible with existing ICE engines and fuel management systems.”

Record February belies continued shortages

Straight off the ship and into driveways – that’s the pattern showing in a big month of new vehicle registrations.

Toyota Hilux kicked dirt into Ford Ranger’s face in February

LAST MONTH’s record run of new vehicle sales isn’t a sign that New Zealand’s distributors are overcoming a severe shortage of stock to sell – it’s because every vehicle arriving here is being snapped up by waiting customers.

There are still big backlogs of customer orders, and as a result new vehicle stock reserves are still less than 50 percent of normal, says the Motor Industry Association.

“Essentially all new vehicle arrivals are going straight from the wharves to the distributors to the dealerships to the customers,” says MIA chief executive officer David Crawford.

“February’s new vehicle sales figure of 12,488 registrations was the strongest for the month of February ever, but it could have been even better - New Zealand is still facing a cocktail of supply constraints.”

These include some factories remaining on go-slow due to issues surrounding the Covid-19 pandemic, shortages of various vehicle parts, and big delays in getting new vehicles shipped to New Zealand.

Despite those issues, February was still a very healthy month for new vehicle sales. They were 9.2 percent up on February last year, and year-to-date the market is up 7.6 percent or 1865 units on the opening two months of 2020.

If the trend continues, March and April will be a welcome change from the same months of last year when sales fell to almost nil thanks to the effects of Covid-19 – the national Level 4 lockdown here, and the lack of vehicle manufacturing internationally.

A feature of the MIA figures for February were some significant changes in what vehicles are the most popular.

Mitsubishi Motors New Zealand’s runout programme for Outlander seems to be going well.

The Toyota Hilux cleaned out arch-rival Ford Ranger to lead the commercial sales race, its 804 sales taking a commanding 21 percent market share, well ahead of Ranger’s 15 percent.

And in the SUV/passenger vehicle segment it was the Mitsubishi Outlander that grabbed top spot from the Mazda CX-5 with 595 registrations – helped along by 133 sales to a fast-recovering rental car industry.

Compact SUVs strengthened their lead over from medium SUVs as the most popular vehicle type. Led by such product as Kia Seltos and Sportage, Mitsubishi ASX and Toyota C-HR, the segment grabbed a 22 percent market share with 2778 registrations. Year-to-date the compact SUVs now hold a 24 percent share, well ahead of the 19 percent held by the medium SUVs.

Toyota remains the market leader for all new vehicle sales with a 16 percent share, but Mitsubishi has improved to 13 percent thanks largely to continued popularity of its Outlander and ASX models, and Triton ute. Ford and Kia share third spot with 8 percent market shares.

“The February market has benefitted from recent stock arrivals and a resilient local economy where New Zealanders continue to spend on new vehicles what might otherwise be spent on international travel,” says Crawford.

The top 10 sellers for February: Toyota Hilux, 804 registrations; Mitsubishi Outlander, 595; Ford Ranger, 549; Mitsubishi Triton, 474; Kia Sportage, 370; Kia Seltos, 364; Mazda CX-5, 360; Mitsubishi ASX, 319; Suzuki Swift, 311; Toyota RAV4, 284.

Strong January, but chips are down for car makers

 A shortage of semiconductors is significantly impacting the world’s car makers.

Toyota Hilux enjoyed another strong month, though overshadowed - yet again - by Ford’s Ranger.

 NEW vehicle sellers made a strong start to the year – but some in the industry wonder if troubles lay ahead.

The Motor Industry Association, which represents distributors, is positive about last month’s tally of 13,893 new passenger vehicle registrations – citing it as being up 6.2 percent on the same month of 2019 and the third most successful January for car purchases. 

Individual brands are celebrating bonanza returns, most particularly Mitsubishi Motors New Zealand which cites the sale of 1403 of its vehicles – 1002 being passenger models and the remainder Express vans and Triton utilities – as being a 30-year peak.

 MIA chief executive David Crawford says the overall industry count suggests huge promise after more than six months of speculation about whether the local motoring industry has ‘turned a corner’ since its big losses during the Covid-19 pandemic’s numerous lockdowns.

He concedes, though, that January’s result was buoyed by “comfortable amounts” of supply arriving, much of which comprised backorders from previous months. 

One industry involver, who declined to be identified, believes January, this month and perhaps March might be the best months of the year.

From there on, he believes, most if not all distributors might start to feel the impact of a global issue for car makers around the world – the shortage of vital computer chips, particular semiconductors.

The factories making these items are now snowed under – and car assembly lines are slowing because products cannot be finished.

A global semiconductor shortage is hurting the world’s car makers.

The local commentator says car makers all around the world have been impacted.

That view is supported by overseas reports that have termed the shortage a “crisis within a crisis.”

Audi is among victims. According to media reports from Europe, it is resigned to 10,000 fewer cars in the first quarter of the year and putting more than 10,000 workers on furlough because it cannot finish cars. 

Its parent company, Volkswagen, announced its own go-slow due to a lack of chips last week, alongside rivals such as Honda.

The issue pre-dates the global Covid crisis; 2020 started poorly for new car sales, particularly in Europe, so brands believed fewer components were required.

Once plants and the countries they locate in were hit, often hard, by Covid-19, many manufacturers cut their orders from the Chinese factories making computer chips. 

The market has since rebounded but now the components are no longer so readily available, as suppliers switched their attention to other sectors, most notably gaming and home electronics.

Ordering new chips has proven to be a challenge. 

As one overseas’ analyst explained: "Semiconductors have a broad range of applications but a very limited pool of companies capable of manufacturing the silicon. 

"Demand is high, and supply is tight" and any sudden needs "can prove very difficult to accommodate". 

"Modern cars are becoming computers on wheels, with an abundance of silicon required to control everything from the infotainment system to camera, radar and lidar," he said. 

The demand from carmakers "competes for manufacturing capacity with smartphones, servers and a host of other segments".

And a boom in the market for devices such as PCs and new game consoles was making it doubly difficult to book manufacturing time. 

Numerous brands have had to suspend production, some for days, some for weeks.

The shortages have seen Mercedes-Benz, Fiat, Ford, Honda, Nissan, Subaru and Toyota all reportedly suspend production for days or weeks at a time.

The MIA has yet to address this matter.

In comment pertaining to last month, it says most of the growth was in the passenger vehicle and SUV sector, which saw a 6.7 percent rise year on year. Commercial vehicles (a sector driven largely by utes) also increased, but by a lesser 5.1 percent. 

The Ford Ranger and Toyota Hilux were the country;s most popular vehicles, respectively with 948 and 750  registrations in January.

Toyota maintained its spot as market leader, with 17 percent market share. Mitsubishi, Ford, and Kia were all trailing, on 10 per cent market share a piece.

It was also a strong month for electrified vehicles, with 1073 hybrids, 93 PHEVs and 244 pure electric vehicles sold. The strongest-selling EV was the Hyundai Kona, with 56 sales, followed by the MG ZS EV, with 49.

Clean car standard aired, 2025 deadline

Government’s push to reduce exhaust emissions is met with mixed feeling.

 RESPONSE from within the motor industry about the ramifications of Government plans to move on its election promises to clean up transport emissions has been swift.

The Motor Industry Association, which represents the interests of new vehicle importers, light vehicle market leader Toyota New Zealand, the Automobile Association – which styles itself as the voice of New Zealand motorists – and Drive Electric, a pressure group pushing for more EVs, have all spoken up since Government today announced the first tranche of measures that it said would help New Zealand's 2050 carbon neutral target.

Already car distributors are arguing that a deadline of 2025 for a clean air emissions standard of just 105 grams per kilometre is too much, too soon. It wants the deadline to be extended to 2030, which is more in line with many other countries.

As is, the ruling could almost certainly make the sale of large capacity, fuel-hungry cars uncompetitive and might also be a hefty challenge to the ongoing availability of one-tonne utilities, a favoured vehicle type, in their current formats as these traditionally operate with diesel engines whose emissions are universally above 200g/km.

Among reported initiatives are something like the "feebate" scheme proposed last year, with Government saying it is considering an incentive to switch to clean cars.

Prime Minister Jacinda Ardern said with transport making up the country's second-highest amount of emissions after agriculture it was "important we reduce emissions from our vehicle fleet", according to a report from Radio New Zealand news.

The report also cited Transport Minister Michael Wood as saying the government had agreed in principle to mandate a lower-emitting biofuel blend across the transport sector.

It has also outlined its plan to only purchase zero emissions public transport buses from 2025, and a $50 million commitment to help councils fully decarbonise the public transport bus fleet by 2035.

Legislation will also be passed this year to introduce a Clean Car Import Standard. 

"The standard will begin next year, with the 105 grams of CO2/km 2025 target being phased in through annual targets that get progressively lower to give importers time to adjust.”

It is understood the terms of this will mean that vehicles with emissions that exceed this will be subject to penalty, likely a tariff, that would likely make those vehicles more expensive to buy.

Those below the line escape this, but do not appear to earn credits, as has occurred in some countries, where similar systems are enacted. Credits are used to encourage transfer to cleaner vehicles, notable those with mains-replenished (as opposed to hybrid) electric drivetrains acting to assist a fossil fuelled engine or completely drive a vehicle.

Car industry data relating to average exhaust emissions by brand suggest just Tesla, for obvious reason, is below the standard proposed by Government. Even Suzuki, which specialises in vehicles with modest capacity engines delivering strong economy, has a fleet-wide CO2 average of 130g/km. 

"The Import Standard will prevent up to 3 million tonnes of emissions by 2040, mean more climate-friendly cars are available, and will give families average lifetime fuel savings of nearly $7000 per vehicle," Mr Wood said.

He said the government was also considering options for an incentive scheme "to help Kiwis make the switch to clean cars", saying that there would be further announcements in the coming months.

The Government proposed a "feebate" scheme last term, but New Zealand First pulled the handbrake on this, following intense backlash from the National Party.

Climate Change Minister James Shaw said these measures were a "good first step", but there would need to be "many more steps taken after this one".

Ms Ardern said the government would finalise its first three carbon budgets later this year, following advice and recommendations from the independent Climate Change Commission.

The MIA’s chief executive, David Crawford, reminded his organisation has long supported “well thought out and constructive policies that will lead to an increased rate in the reduction of CO2 emissions from the light vehicle fleet..” 

In respect to today’s announcement, he said: “We welcome the Government’s commitment to introduce incentives and await more details on how these will work.

“However, while we believe the fuel economy standard is necessary, the speed at which we must reach the average target of 105g/km is the most aggressive and severe in the world. No other country has ever had to face a 40 percent rate of reduction in five years that we now must meet.”

The industry will urge the Government to extend the target date to 2030, a sentiment also expressed by Toyota NZ chief executive Neeraj Lala, who called the target “a tough ask.”

TNZ and luxury affiliate Lexus had a target to reduce tailpipe emissions to 152g CO2/km and 178g CO2/km respectively by 2030. Toyota’s hybrid car sales increased from 1636 in 2017 to 12,210 in 2020 and more hybrid and plug-in hybrid models will be launched this year. The makes’ first electric car, the Lexus UX 300e, is set to launch this year.

Mr Crawford said the 2025 target date “does not allow time for model development, vehicle sourcing arrangements and does not recognise that for many distributors in New Zealand their model choice is tied to the Australian market.

“With no similar policy required in Australia, our market, which represents just 0.018 percent of new vehicle production in any one year, is too small for manufactures to develop models just for us.”

The MIA also wants the rules to be the same for both new and used imported vehicles. The policy at present allows softer penalties for the latter. Mr Crawford believes this “will lead to an increase in older, less safe vehicles entering New Zealand.” 

The AA has also expressed many of the same concerns.

“The proposed emissions target for 2025 is an aspirational target that may not be achievable,” says spokesman Mark Stockdale.  

“We understand the intentions behind it and our members want to see more low-emissions vehicles available here.

“But the risk is that this target could simply result in higher prices for new cars that still don’t meet the emissions standard. That could even result in people holding onto their older, higher emissions car for longer.”

The biofuels mandate appeals. “The emissions standards focus on the approximately 300,000 vehicles entering the fleet every year, but we also need to reduce the emissions from the existing fleet of some 4.6 million vehicles. Biofuels are one way to do that.”

The AA says it supports a feebate which would complement an emissions standard. “Other countries have both an emissions standard and a feebate scheme, and their experience shows that both work to reduce emissions from new vehicles entering the fleet.”

The AA also wants a broader fleet strategy developed by the government and motor industry to devise an action plan to reduce transport emissions and also improve the safety of the fleet.

DriveElectric chair Mark Gilbert says standards proposed for 2025 have already been met in other comparable markets, like the European Union and Japan “and must be achievable here."

“The standard is a useful tool in that it asks importers to look at the portfolio of vehicles they are importing, which should increase low emissions choice across a range of vehicle types and price points. With more EVs coming into New Zealand, this also increases the second-hand market over time. 

“That said, such a standard is really just a first step towards managing a transition away from fossil fuel vehicles and towards no emissions vehicles.”

The organisation believes that to meet New Zealand’s legislated climate ambition, which is to keep global warming within 1.5 degrees Celsius, “our analysis shows we need to aim for at least 250,000 EVs on the roads by 2025, and for this trend to continue through to 2030.”

It argues Government needs to look to announcing a date by which NZ ends the importation of fossil fuel vehicles entirely.

“To support such ambition, we need a joint plan between the Government and industry to ensure we have the right package of policy settings, the necessary investment in charging infrastructure, and coordination among all the players through the EV ecosystem - from the grids, to electricity retailers, to car importers, councils and property developers.

“Policies that need to be considered include incentives, adjustments to fringe benefit taxes and depreciation, and investment to ensure we are ready for more at-home charging and public charging.”

2020 new vehicle market set to be down 20 percent?

The global drop in new vehicle production during 2020 has been sobering – and is bound to affect NZ’s registrations count for the year.

Covid-19’s impact on car production was unavoidable in 2020.

ABSOLUTE clarity about the state of the New Zealand new car market in 2020 might be weeks away from resolution, but first indications about how the industry fared globally are sobering reading.

Gut feeling from within the industry here is that there’ll be no surprise should the year-total new car and light vehicle registrations count come to around 117,000 units, so around 20 percent down on the 2019 tally and the lowest annual count since 2013.

That kind of decline would be slightly greater than those predicted for the world’s three largest car markets – the United States, China and Germany.

But all has yet to be clear. New Zealand industry participants are awaiting one more set of figures, the registrations count for December, before they can achieve a total picture of the year’s trends and activity. 

As is always the case, this data doesn’t come easily - simply because the Government department involved in the accrual process, Land Transport, closes down over Christmas and New Year.

It is likely that provisional counts might be availed on January 5, but unlikely that full counts will be availed before January 11 – a much slower turnout than for any other month of the year, when normal business conditions apply.

That won’t inhibit individual brands from calculating their own in-house data – they, of course, know exactly how many cars they have retailed at any given time – but does make the achievement of a big picture view much more challenging, as competing brands are quite naturally loath to share.

Even so, the global picture is starting to take shape and it might well provide a pointer as to how the NZ scenario will shape up. 

In which case: Don’t expect an easy ride. The impression that NZ has done okay, simply because we experienced an unexpected surge in new vehicle purchasing activity in the months immediately following the easing of national lockdown conditions from April, does not mean that the market is set to show a decent result.

The big problem, evidenced especially within the final quarter of the year, has been one that should be pretty obvious to anyone who has been visiting new car franchises these past few months. The decreasing count of vehicles on display – and the increasingly obvious amount of unfilled display space -speaks volumes about how constrained supply has become.

Fact is, the vehicles that were bought during that sales rush were all easy pickings, being by and large, examples held in the national stockpile.

What’s become more challenging is achieving replacements for those units – Covid’s interference with not only car-making but component provision and then supply networks has been dramatic. Plants might still be making vehicles, but the rate of production has slowed and, often, so too the processes.

Coronavirus has given the world’s car makers a really rough ride in 2020; according to one report just out from an analyst based in the United Kingdom, all signs are that global car sales were down by $612 billion in 2020 and the entire market appears to be down by 10 percent. 

Data presented by StockApps.com, based on collations by a specialist, Statista, confirm what has long been accepted fact – that the Covid-19 pandemic hit the industry hard, causing supply chain disruptions, factory closures, and huge sales and revenue drops. 

StockApps picks the downsizing trend is set to continue this year and next, pointing out that even before the pandemic, the world’s car makers were already coping with a downshift in global demand.

In 2019 global passenger car sales revenues amounted to $US2.29 trillion. Small SUVs sales, as the largest revenue stream, generated almost 30 percent of that value or $US647 billion.  

Large SUVs and large cars segments followed with $US362bn and $US275bn in revenue, respectively.

However, the COVID-19 pandemic caused a huge hit, with total car sales revenues falling by almost 20 percent year-over-year to $US1.85trn in 2020.

Statista says its data suggests revenues in the large cars segment are expected to drop by 25 percent year-on-year, to $233bn.

Large SUV sales are set to witness a 24 percent cut, with revenues falling to $US275bn in 2020. Small SUVs follow with a 20 percent drop and $525bn in revenue. 

Analysed by carmakers, Toyota represented the market leader with a 10.6 percent global market share in 2020. Volkswagen ranked second with a 7.4 percent market share. Nissan, Ford, and Hyundai follow, with 6.6, 6.2 and 5.6 percent shares respectively. 

Statistics show the downsizing trend is set to continue in 2021, with global passenger car sales revenues falling to $US1.65trn. In 2022, this figure is expected to decrease by another six percent to $US1.55trn.

Statista data also revealed that all of the leading car markets are expected to witness a two-digit revenue drop this year.

As the largest market globally, the car sales revenue in the United States is forecast to fall by almost 18 percent year-on-year to $US507bn. This figure is expected to plunge to $US385bn in the next two years, nearly 40 percent less than in 2019. 

China, the second-largest market globally, achieved $US452bn in revenue in 2020, an 18 percent fall year-over-year. By 2022, total car sales revenues in China are set to drop to $US405bn.

As the third-largest market, Japan witnessed an almost 19 percent year-on-year drop when comparing 2020 and 2019 data sets, with passenger car sales revenues falling to $US92bn in 2020. Germany follows with $US86.5bn in revenue, 17 percent less than in 2019. 

In all, the three leading markets have likely lost $US231.5bn in car sales revenues in 2020 due to the Covid-19 crisis.  

In sickness or in health – what’s the impact of Covid on car distributors?

Look around many new car dealerships and it seems clear some are running short of stock. So how hard hit are distributors?

TEN days ago Toyota New Zealand’s chief executive acknowledged the effects of Covid-19, closed borders and delayed shipping and logistics into NZ are “severely” impacting on all operational areas of his business. 

Which means? Specifically, said Neeraj Lala, availability of most new popular Toyota models is impacted. Many popular models are subject to waiting lists, with potential for delays to continue into the middle of next year.

This was not news to MotoringNZ. From mid-year, we’ve been reporting the emergent issues stemming from Covid-19, notably that the big unexpected run in new car sales had severely depleted the national stockpile.

Toyota’s bold admission raised a question: Would the market leader’s bold and frank attitude encourage others to lend insight into their own situations?

Turns out they needed some encouragement. Last Thursday this writer contacted a slew of brands distributors – not all, but mainly the higher-profile players - as well the national body representing the new vehicle performers, the Motor Industry Association, to gauge their mood. The specific questions were: “What is the situation for your brand(s); what policies are in place and what message can you send your customers?”

Some provided in-depth responses. Some said they would not comment. Several did not respond at all. 

First, those who were happy to offer insight: 

Audi New Zealand, general manager Dean Sheed: 

“The issue is threefold.

First, local demand post Covid is stronger than anyone anticipated and what is arriving was ordered and forecasted four months ago – hence we are running down local (dealer and importer stock).

“ Also, factories can’t ramp up instantly – it takes time and the shipping takes six to eight weeks. We forecast a more balanced situation in March, 2021. 

“Also, though this has less impact, shipping is not back to 100 percent capacity. The shipping companies are not sailing all ships yet, hence capacity constrained. 

“Our messaging to customers is simple. ‘Don’t expect the dealer network to have the perfect car for you in the feature level you desire in stock. You may need to compromise if you want it today and are not planned.’ 

“We have launched a “new car” all dealer stock search locator on our website to assist with consumers finding a car – not due to this situation but for a better customer experience – in addition to the usual “used car” locator. https://search.audi.co.nz/new

“Many premium customers still like to order their specific car to their specification. That’s business as usual for us.”

Ford New Zealand, managing director Simon Rutherford: 

“At Ford we have seen higher than anticipated levels of demand across our range – especially on Ranger, Everest, all-new Puma and Escape as evidenced by increased shares of those segments.  

“Our dealers are at historically low levels of stock and our supply chain is more under strain from COVID demand recovery and sales across multiple markets than COVID supply chain issues specifically although they are a factor when you have a 4-6 month lead time(dependent on source) from order to arrival in market. 

“We would love to have more stock on the ground right now to support our customers and minimise the order to delivery time for our customers – they are having to wait longer than we would like.

“Thankfully, we have good supply “on the water” and are getting the support we need to gain additional production capacity/allocation where needed from our various plants around the world ranging across the US, Germany, Spain, Romania, Turkey and Thailand.

“We have strong order-banks going into January and on vehicles lines such as Puma where supply is tight (only 13 unregistered in market today) we are only allocating future arrival vehicles to dealers on the basis of a signed customer order.
“We have seen further disruption at the port which is a further factor impacting delivery of vehicles already built. The COVID challenges are far from over as we anticipate further disruption with supply chain capacities being squeezed by markets competing for capacity, supplier capacity ramp up challenges and distribution capacity hampering the movement of parts globally to support production and service operations. Container shortages, air freight capacity and port disruption are not new but they become more pronounced when demand is in recovery. 

“We have been working closely with our dealers to support customers with loan cars if their vehicle is off road to ensure they are kept mobile over the holidays and have placed additional loan cars at dealers.

“We track and publish vehicle ETA’s to our dealers and provide our customers with their order details so they know they have an allocated unit on the way.  

“At Ford we’re here to help so we encourage our customers to keep in touch and we’ve got their back – we thank them for their patience and understanding.” 

Mitsubishi Motors NZ, chief operating officer Daniel Cook: 

“There are two major factors influencing our new vehicle stock levels, supply and demand.

“On the supply side, we are experiencing only minor supply shortages out of the Mitsubishi factories, due to the impact on global supply chains. 

“There is also a challenge getting vehicles onto boats, and offloaded in a timely fashion due to the severe congestion at ports globally as general consumer demand resumes. This is being accentuated by the Christmas retail period in NZ.  

“Overall, our stock levels are lower than normal, however we are still receiving good deliveries, and in December alone we will have over 1500 units land, which is much more than a month’s supply. 

 “Most customers are presently waiting a month for their choice of vehicle and seem understanding of the shipping issues facing all importers.”

In respect to demand?

“Right now, we are experiencing unprecedented customer demand for our vehicles. Over the past two months (October and November) our retail sales have increased significantly on 2019, and are now limited only by our ability to supply everything our customers want.

 “Our brand is doing exceptionally well this year, due to our great value offerings, relatively strong stock levels and introduction of new models like Eclipse Cross and Express van. We are strongly growing market-share, peaking at 11 percent last month.

“I expect stock will remain tight over the next six months as our growth continues.”

Subaru New Zealand, managing director  Wallis Dumper

“We have been running a just in time process for decades that has fostered strong customer service and expectations plus naturally held residual values.

“ Covid19 had potential to be devastating. It did have an immediate impact and ‘just in time’ potentially became ‘just too many’. Like everyone else, we predicted the market would slow or even stop due to Covid.

“We were wrong in that assumption. The impact was not as bad as envisaged after the initial lockdown was over.

 “But then the world impacts started to hit us via factory allocation shortages - so we have endured massive impact by other larger scale markets influence on the Japan factory supply.

“We have had months with not enough cars but now the good news is our new model launches in 2021 have been supported by a Subaru Corporation allocation promise. 

“Based on this allocation all we can do is plan accordingly and maximise any opportunity to secure any extra stock that might become available.

“We are optimistic that we will get what the factory have promised us thus our hope is to launch the new models, like our completely new Outback, successfully and be able to deliver what customers order.

“We will strive to hold our position as the No.11 distributor in the world for Subaru. Despite all the impacts Subaru in New Zealand with only five million Kiwis is still selling more Subarus than countries like the UK with 60 million.

“My guess is that there will be various model shortages from time to time in 2021 as a result of our scale which is simply not able to influence things like a downturn in massive scale markets impact on the factory production.

 “We even launched our hybrids e-Boxer models in the middle of the year despite lockdowns. We are fortunate that we go into 2021 with all models being of the  21MY model designation so that’s XV and Forester and Impreza and WRX, already arriving for 2021. 

“It is all looking okay and reality is that I think other brands might start copying our business model of having customers forward order their brand new vehicle in the specific model choice knowing its  … actually brand new fresh off the factory floor.

“Then we will start planning for 2022 as my guess is there will be more exciting All Wheel Drive Subaru models on the way and we will make sure we get a solid factory allocation for our loyal Kiwi customers and strive to keep all those Kiwis in our business and Subaru dealers nationwide employed too.”

Volkswagen NZ, general manager Greg Leet.

“The Volkswagen brand, like other vehicle manufactures, is experiencing supply constraints due to the impact of Covid-19 in Europe.

“Thankfully it is a very different situation here in NZ.

“We have been fortunate that the timing has coincided with the run out of the Golf and the launch of the all-new Golf 8 (expected to land in February). The same situation with Tiguan, as we run down the current model with the arrival of the new facelift in February.  

“Our German colleagues have managed the situation well and as a consequence we have picked up production of other models from other markets effected with further lockdown measures.  

“Supply matching demand is key to our brand, we have seen a re-set of the industry in 2020 with stocks in such short supply and I would predict manufacturers will focus heavily on this moving forward.  

“We are very thankful to our loyal Volkswagen customers who have been understanding of the stock limitations. 2021 is very looking very positive with new stock arriving and we are seeing a big appetite for these new models, with a large number of customers pre-registering their interest.

Motor Industry Association, chief executive David Crawford:

“Stock arriving now was ordered three to seven months ago.

 “Factors affecting supply are that markets are stronger now than when the vehicles were ordered, so demand has exceeded supply; that the source markets are still experiencing partial shut down at some factories (this disruption is reoccurring when outbreaks of Covid-19 occur in source markets) and that shipping capacity has been constrained, timeliness disrupted and so on. 

“I would expect to see this pattern continue until the vaccine takes hold and Covid-19 comes under control. It may take to the end of 2021 to settle down properly. 

“None of this is a surprise, apart from stronger NZ demand for cars. We predicted the current hiccups in supply back in April. 

“Stronger demand has come from the $4 billion Kiwis usually spend on overseas’ travel each year instead going on cars, bikes, boats, caravans, home renovations and so on.

Hyundai New Zealand offered a single sentence response: “Certain models have been affected at certain times due to the global ramification of COVID, thus reducing production supply, however we have had and continue to have a steady supply of stock coming in.”

BMW NZ, Mercedes Benz NZ and Kia Motors NZ declined opportunity to take part. Ateco NZ (Alfa Romeo, Fiat Chrysler, Jeep, RAM, Maserati), Mazda NZ and Volvo Cars NZ did not respond.

Feebate 'best' route to lower exhaust emissions

Forget about banning gas guzzlers – convince motorists to buy low-emission vehicles, says the new car industry’s voice.

The lower a passenger vehicle’s emissions, the bigger the incentive, the MIA believes.

NEW vehicle importers have begun urging the Government to introduce a feebate scheme to accelerate the uptake of low-emission vehicles.

In a move obviously designed to see off any chance of an outright ban on importing vehicles fuelled by petrol or diesel, as has just been suggested by the Green Party, the Motor Industry Association, which presents new vehicle distributors, is pushing for new policies aimed at incentivising motorists to buy passenger models with the cleanest exhaust emissions – or none at all.

Chief executive David Crawford says members are strong supporters of having effective policies to encourage the reduction of carbon emissions from transport.

The way to do that is not to introduce policies aimed singularly at limiting vehicle supply. This would happen if the Government adopted the United Kingdom’s decision to ban pure petrol and diesel vehicles from as early as 2030. More preferable is to have policies that influence demand by incentivising the adoption of low technology technologies, Crawford says.

Such policies would be effective tools so long as they were implemented in a way that addressed the price premiums the low-emission vehicles have, he adds.

And the best way to achieve that is to introduce a feebate scheme that encourages car buyers to choose vehicles that are more efficient and less polluting, through rewarding those who do by giving them a rebate on the purchase price, funded by fees added to the price of less efficient vehicles.

“Because the distribution of new vehicles in New Zealand is a derived demand model, a well-designed feebate scheme incentivises change as it influences the purchase decision,” he says.

“This in turn alters the mix of models supplied by distributors which is more influenced by what is bought, and therefore restocked, rather than policies aimed singularly at limiting supply.

“Low emission technology is expensive, so policies that address low emission vehicle affordability are likely to be the most effective tools available to the Government.”

The previous Government proposed a ‘clean car initiative’, a ‘clean car standard’ (which would be a vehicle fuel-efficiency standard) and a ‘clean car discount’ (which would apply a rebate or penalty depending on exhaust emissions).

At the time, the MIA said it welcomed sensible discussions on ways to make vehicles cleaner and greener, and it promised the new car sector would work constructively with Government to help  create the best mix of policies to achieve that outcome.

The organisation didn’t like the ‘clean car standard’, because it implied that distributors had a significant influence on what vehicles Kiwi motorists chose to buy. It claimed that policies aimed at controlling supply into our market, imposed artificial controls that could distort the market.

But the MIA was particularly keen on the proposed ‘clean car discount’, as it would send a very clear signal to consumers and would over time increase demand for lower emitting vehicles. The MIA said that in its view it would be the most powerful policy available to the Government to influence car purchase decisions.

However, later in the year the whole ‘clean car initiative’ came to a screeching halt when the kybosh was put on the proposal by New Zealand First, a partner in the then coalition Government.

The MIA is asking for the ‘clean car discount’ to get picked up again by the new Labour Government, and as originally suggested it should apply to all light vehicles of less than 3500 kilograms gross vehicle mass.

Under the MIA’s proposed feebate scheme, vehicles with CO2 outputs of 230 grams per kilometre and above would pay a penalty, those with emissions of between 100-230 g/km would be in a “neutral” zone, those with emissions of between 50 and 100 g/km – which would be some hybrids and most PHEVs - would attract a low rebate, and those with CO2 outputs below 50 g/km would attract the highest level of rebate.

“If the Government were prepared to put say $10 million a year for several years into the feebate scheme, then the level of rebate for low emissions vehicles could be higher thereby significantly increasing the rate of uptake of low emission vehicles,” says Crawford.

He adds that the level at which a fee or rebate (and the size of the neutral zone) would need to be lowered with each successive year, so that over time these would become more challenging. If the Government agreed to contribute to the rebate fund this would also reduce over time.

MIA: Feebates to encourage efficient cars better than outright ban

We’re not well-placed to even consider following the UK’s ban on selling fossil-fuelled new cars from 2030, the new vehicle industry contends.

CONTENTION New Zealand should follow Britain’s lead and pursue a ban of sale of fossil-fuelled cars and vans from 2030 has alarmed new vehicle importers, whose representative body says that deadline is way too close.

David Crawford, chief of the Motor Industry Association, which represents factory-appointed distributors, says his organisation does not dispute that a ban on pure petrol and diesel vehicles might become necessary at some future point.

However, thought proposed by Greens co-leader and Climate Change Minister James Shaw that NZ needs adopt the same policy announced in the UK this week, and introduce a ban on the sale of new petrol and diesel cars in 10 years, has alarmed and, the MIA contends, is based on poor information.

“2035 is too soon let alone 2030. Readily available and affordable alternatives are not yet apparent with the priority given to the development of left-hand drive markets. 

“I believe that some of the premises underlying James Shaw’s comments about doing the same in NZ are ill-informed.”

Mr Crawford explains that the new vehicle market operates off a derived demand model, not a supply model.

“Change what customers buy and we will change over time what is supplied. Supplying items that sell is where companies aim to operate.”

The MIA remains a supporter of the feebate Clean Car Policy thwarted under the previous Labour government by its then coalition partner, NZ First.

The proposal to encourage car buyers to choose vehicles that are more efficient and less polluting, through rewarding those who choose more efficient models by giving them a rebate on the purchase price – this funded by fees added to the price of less efficient vehicles – remains unreconciled. 

Had it got through, from next year, the most efficient vehicles up to three years old would have conceivably cost up to $8000 less, while the least efficient would cost up to $3000 more. Older used imports (sold in New Zealand for the first time) were to attract a maximum rebate of $2600 or a $1500 fee. 

Mr Crawford offers that a feebate would be much more effective than a ban.

“Bans will create a lot of issues, resentment and perverse behaviour. People will hold onto their old vehicles for much longer.”  

The main issue facing the NZ market is affordability and access to a suitable range of makes and models that fit customer needs, he adds. 

Having crunched the numbers, the MIA was certain the rise in transport emissions was not coming from new vehicles. He said Mr Shaw’s reference to diesel utes, which are popular are do produce relatively high emissions,  with comment about NZ’s love affair with Ford Ranger – usually the country’s best-selling one-tonner and occasionally its best selling vehicle on monthly count – was “shallow.”

“The sales-weighted average emissions for the new vehicle fleet is reducing year on year … not fast enough but it is reducing.

“The rise in transport emissions in NZ has more to do with the increase in the rate of vehicle ownership.

“Over the last decade it has gone from being well less than 700 vehicles per every 1000 people to well over 800.”

This, he contended, is mostly due to “the flood of cheap old, used imported vehicles.  

“Address the rate of vehicle ownership and we begin to address overall transport emissions.”

In direct respect to the UK’s ban, he said there were risks for that country, particularly in its standing as primary market. There are few right-hand drive markets; Britain is presently well-considered by car makers but there was potential its importance could diminish with this.

General Motors’ pulling out of right-hand drive market for sedans and SUVs around the world this year was effectively the death of Holden, a popular brand here.

“The point in favour for the UK, versus Australasia, is their market size. Their market might be big enough for manufacturers to prioritise development for their market. It’s a big question mark, though. 

He believes manufacturers will struggle “big time” to meet the UK’s timeline.

However, one positive for NZ is if makers do put more effort into meeting that timeline, “then it might mean we get a wider range of right-hand models developed sooner than what would normally be the case.”

If that were to unfold, NZ would be better to adopt policies to “make us a fast follower. Feebates to address affordability is the best approach in our view.”

Kia scores big during troubled October

Kia took control of passenger car sales last month, its Sportage and Seltos respectively accomplishing first and second places for registration count.

KIA SELTOS ENJOYED A STRONG MONTH. The larger Sportage did even better.

KIA scored a notable triple win during October, its compact and medium sports utilities achieving as the biggest-selling vehicles, and the brand coming out on top in total passenger registrations.

October market statistics supplied by the Motor Industry Association today show the Kia Sportage was the most popular passenger vehicle in October, with 488 sales, followed by its smaller brother the Seltos, with 471.

That was sufficient to allow the Korean brand to achieve a total of 1276 passenger vehicle registrations for the month, knocking long-time leader Toyota, which achieved 1117 sales, into second place.

It all represents a big turnaround in a 2020 new passenger vehicle scene that up until now has been dominated by the Toyota RAV4.

In September, for example, the Toyota achieved 464 sales – whereas the Sportage and the Seltos each accrued about half that. In October, however, RAV4’s sales dropped to 291 units.

There was better news for Toyota in the commercial market, where the new Hilux moved into first place with 731 sales, knocking the previously dominant Ford Ranger into second. It achieved 686 sales.

the updated toyota Hilux appeared to score well in its first month of availability, bumping out Ford’s Ranger as the country’s favourite utility.

Both utes finished the month comfortably ahead of anything else – third place was taken by the Mitsubishi Triton with 282 registrations.

Toyota also remained the overall new vehicle market leader with a 17 percent share in October via 2070 registrations, followed by Ford with 11 percent and Kia with nine percent. And it remains dominant for the entire year to date thanks to a 17 percent share – well ahead of Ford on 10 percent.

October’s total new vehicles registrations continued their downward trend for 2020, coming in at 20.6 per cent below October last year. A total of 11,876 vehicles were registered, down 3089 units on the same month last year.

“Year to date the market is down 23.5 per cent, which is consistent recent months’ data confirming our expectations that 2020 will finish about 25 per cent down on 2019 volumes, said MIA chief executive David Crawford.

The top 10 most popular vehicles in October were: Toyota Hilux, 731 sales; Ford Ranger, 686; Kia Sportage, 488; Kia Seltos, 471; Toyota Corolla, 315; Mitsubishi ASX, 292; Toyota RAV4, 291; Mitsubishi Triton, 282; Mazda CX-5, 279; Suzuki Swift, 232.

Pandemic, sales rush depletes new vehicle stocks

New car sales have been running hot … but at what ultimate cost? Brands are running short of stock and the industry says buyer demand is racing ahead of ability to supply.

New vehicle stocks held in New Zealand are diminishing fast … and replenishment has slowed.

NEW vehicle distributors are facing a new Covid-19 crisis – not enough vehicles to sell for at least the remainder of this year.

An unexpected rush in sales over the past few months has accelerated the issue of diminishing stock availability, a ripple effect from Covid-driven global assembly line shutdowns that occurred months ago.

It’s a double-whammy that is leaving showrooms running low on stock with no easy respite in sight.

The organisation that speaks for the new vehicle industry has declined to cite any brands or cite any specific models and is cautious when discussing the severity of the situation.

The Motor Industry Association does, however, acknowledge there are now insufficient vehicle numbers to meet present buyer demand.

Says chief executive David Crawford: “I wouldn’t describe the situation as catastrophic … but it is lumpy.”

Talk at retail and distributor level is certainly awkward; popular models are becoming harder to secure and orders taken now might not be fulfilled until next year, while impending new products are being delayed and allocations being reduced.

One big provincial yard for a top make last week suggested the cars it held in its showroom could not be easily replaced. A metropolitan outlet for a popular premium brand also recently said ready availability of two core models has also been in jeopardy. The distributor for that make did not respond to questions about this.

New vehicle distributors normally carry up to 100 days’ stock for vehicles and large parts, but this has reduced by around 50 percent.

At the end of last month, the national inventory of new passenger vehicles was just over 11,000 units – the lowest in at least eight years and half the tally held in April – and it’s been worse for commercials, that stockpile have quartered to under 5000 vehicles.

Most distributors, at best, are carrying no more than about a month’s stock, according to the MIA, which has been collating information from factory-appointed new vehicle importers.

At retail level, this means an increasing count of outlets are keeping up their business by taking customer orders on understanding those buyers may have to wait until early next year before their purchases arrive.

Crawford suggests a combination of market forces and temporary vehicle supply constraints will continue for most of 2020.

While shipments keep arriving, there are now likely to be long wait times for some makes and models and customers who have pre-ordered will have priority over walk-ins.

“Supply of vehicles remains affected by reduced factory production in various geographic places due to Covid-19 restrictions.

“Distributors are also facing challenges predicting how much stock to order and hold.

“It has to be admitted the industry got caught by a strong June and July, once the Covid restrictions eased,” he says.

“The industry didn’t entirely anticipate the level of demand for new vehicles.

David Crawford, Motor Industry Association chief executive: “The industry didn’t entirely anticipate the level of demand for new vehicles.”

“We didn’t factor in that people who were unable to travel overseas on holiday, would decide to purchase a new vehicle instead – just like others would have decided to renovate a kitchen.”

Though already braced for a slowdown in sales when the year began, the new car market was nonetheless in good shape, having had a series of highly-profitable bumper years.

Coronavirus rendered all forecasts worthless. Assembly plants all around the world were forced to shut down – some for several weeks, some for up to two months - because of the pandemic.

Though most are back in business, many have yet to achieve full production. Even when assembly lines are back to full steam, delays from components suppliers are common.

The supply chain also hasn’t recovered. This is particularly the case with product coming out of Europe, which even under normal circumstances have to be ordered up to six months in advance.

However, it seems probable all makes and sourcing points have felt impact to some extent.

Also hurting New Zealand is the modest size of our market – there have already been instances were other countries more important to makers have been given higher priority.

All this means that as much as recent months of emergent retail frenzy was welcomed, it has also been a sting because it was unexpected.

While the MIA warned as early as in March it would be inevitable that the shock wave from Covid’s impact on global car making and the parts industry was inevitable, it didn’t predict that consumers would go into such a buying frenzy these last few months.

Data shared by the MIA for this story reveals how NZ’s relatively healthy vehicle stockpile before Covid has pretty much gone.

At the beginning of this year the national new passenger vehicle inventory stood at 16,049 vehicles.

new vehicle production has largely resumed .. but plants are rarely operating at full-scale pace and makers are sometimes steering product to bigger markets than New Zealand.

This rose to 20,327 vehicles in April, but the countrywide Level Four lockdown, then meant cars that landed but could not be retailed – hence, despite 5625 vehicles being cleared by Customs in April, only 707 vehicles were registered in that month.

Since then, the figures have been sliding as supply of vehicles built and in transit before the factory closures started to dwindle.

May’s inventory was 18,888, this reduced to 15,088 in June, to 12,593 in July and to 11,057 last month.

August’s count was the lowest in at least eight years but stock numbers are expected to reduce even further for at least the next two months.

Meanwhile, the import clearances are continuing at history low levels as they slowly recover to some normality – 2858 in May, 4619 in June, 4327 in July and 5405 in August – but they are not meeting the growing consumer demand. That’s at least 50 percent higher.

The commercial vehicle inventory that sat at around 12,000 vehicles in April and May had reduced to 4817 vehicles by the end of last month.

Since then, consumer demand has increased to the extent there were 3533 registrations in August – way ahead of the 962 vehicles that had cleared Customs. This means that for the remainder of the year there is virtually no fat in the commercial vehicle inventory.

Parts supply is also being severely affected by the pandemic. Prior to Covid-19, parts were transported to New Zealand by both air and sea, but air freight has now become too expensive due to reduced numbers of flights, and this has forced more use of sea freight which has much longer time frames, Crawford says.

The flow-on from the drop in new car availability is also being felt in the used car sector, with a commensurate drying up on late model pre-owned stock from fewer trade-ins occurring.

# Additional reporting by Richard Bosselman

Stay at home, buy a car

Latest monthly registration figures have surprised the industry, but it’s not expecting this boom to last.

RAV4 was a sales star for Toyota last month.

CASHED-up Covid-19 returnees look to be contributing to a spike in national new vehicle sales – with the July count almost at record level.

Motor Industry Association data for last month suggest registrations of 12,263 new vehicles; that’s 3.1 percent and 366 units better than the count for July of 2019 and also the second-strongest July ever recorded by the MIA.

The result was also in stark contrast to June, when sales of 11,514 vehicles were recorded. That count presented as a 17.5 percent on the same month of the previous year.  Yet June was in itself way better than April and May when, in the midst of the Covid-19 lockdown, 1039 and 8313 registrations were respectively recorded.

MIA chief executive David Crawford describes the July result as surprisingly strong, given the current worldwide economic conditions.

“Returning cashed-up Kiwis and alternative spending to international travel are thought to be behind the July result,” he says.

Market leader Toyota New Zealand says no-one could have anticipated the level of sales last month, given that it is usually a cooling off period in the wake of May and June, which have traditionally been big sales months.

Colorado is leading Holden’s sales runout

“The level of new orders across our entire range has surpassed our expectations,” says chief executive Neeraj Lala, adding that TNZ’s July result was the biggest retail month since the launch of the brand’s Drive Happy business model in April of 2018.

Crawford warns however that as the year progresses the economic outlook is for a continuing tightening market.

Despite July’s good result, the tough three month during the opening half of 2020 have meant that year to date the new vehicle market is down 24.8 percent or 21,694 vehicles.

July saw 8200 passenger vehicles and SUVs registered which was 3.5 percent up on July last year, while 4063 commercial vehicle registrations were up 2.3 percent.

The top three models for the month were the Toyota RAV4 SUV, followed by two utes, the Ford Ranger and Toyota Hilux.

Toyota remained the overall market leader with an 18 percent share, followed by Ford with 10 percent and Mitsubishi with eight percent.

Toyota also led passenger and SUV sales with a 17 percent share thanks to solid sales of the RAV4, Corolla and C-HR, followed by Kia on nine percent largely due to sales of Sportage and Seltos SUVs, and Mitsubishi with eight percent, thanks to continuing good sales of ASX and Outlander.

Ford regained the market lead in the commercial vehicle sector with a 22 percent share, resting on the imprint of its top-selling Ranger ute but also good sales of Transit van. Toyota was second on 20 percent thanks to Hilux and Hiace van, while soon-to-disappear Holden was third with a 10 percent share via sales of 381 Colorado utes.

Overall the top segments in July were dominated by SUVs. Top spot went to SUV Medium with a 22 percent share, followed by SUV compact on 19 percent. The Pick Up/Chassis 4x4 segment held 16 percent share.

Last month’s top 15

Toyota RAV4                 796 sales
Ford Ranger                  781
Toyota Hilux                 627
Mitsubishi Triton          383
Holden Colorado          381
Kia Sportage                 320
Mitsubishi ASX              265
Suzuki Swift                  251
Toyota Corolla              230
Nissan Navara               229
Mazda BT-50                227
Mazda CX-5                  222
Mitsubishi Outlander    220
Hyundai Tucson            206
Kia Seltos                     184

‘Closed for business’: New car industry appeals for help

April’s new vehicle sales count provides dramatic proof the Covid-19 pandemic has the new vehicle industry reeling.

COVID-19 has swung a near-knockout blow to New Zealand’s new vehicle industry, with April recording a more than 90 percent fall in vehicle sales.

In stark contrast to April last year when a record 10,640 new vehicles were registered, the national Coronavirus lockdown is the reason behind just 1039 vehicles being registered last month, with the top-selling model, Kia’s Seltos, registering 95 of those.

Now, the organisation representing the country’s new vehicle industry says it needs help – and it is demanding the Government fast-track introduction of a series of policies to achieve this.

“The Government can play a decisive role in lessening the economic pain we are feeling,” says Motor Industry Association chief executive David Crawford.

The organisation wants deferral of introduction of any feebate scheme, replaced instead with incentives for the purchase of fuel-efficient vehicles.  Feebates  are a combination of fees imposed on larger gas-guzzling vehicles and rebates offered to purchasers of smaller and fuel-efficient vehicles.

“Prior to the pandemic, the MIA supported in principle the adoption of a feebate scheme. However, given the degree of fiscal impact the pandemic is causing, we believe this policy needs immediate review,” says Crawford.

The MIA also wants the Government to accelerate the uptake of plug-in vehicles  across the Government fleet.

“To date, uptake of plug-in vehicles by government agencies has been less than modest at best. The MIA calls on the Government to increase departmental budgets to permit departments to increase their uptake of BEVs and PHEVs,” says Crawford.

Financial incentives should also be introduced to remove from the national fleet vehicles older than 20 years, and/or where their exhaust emission standards are the equivalent of Euro 3 or less, Crawford says. He adds that this vehicle scrappage would be in line with the country’s new road safety strategy and the Government’s climate change objectives.

 “We all know we have an old fleet, with numerous polluting and unsafe cars roaming our roads,” he says.

Crawford describes April’s new vehicle scene as “closed for business” other than for the supply of essential vehicle and three business days at the end of the month for contact-less sales.

That distributors were able to sell as many as they did was testament to their determination to partially re-open for business while maintaining strict health and safety process,” he says.

Overall, new vehicle registration were down 90.3 per cent in April – sales of passenger vehicles and SUVs dropped 89.6 per cent, and commercial vehicle sales were down 91.4 per cent.

So dramatic was the fall in registrations, that some highly unusual sales results were recorded by the MIA.

Market leader for the very first time was Korean brand Kia, which achieved a 16 per cent share with 169 sales, including 95 Seltos small SUVs, 24 Rio hatchbacks, and 22 Sportage compact SUVs.

The Seltos was also easily the top-selling passenger vehicle, with the Suzuki Swift hatch and the pint-sized Suzuki Jimny SUV in second and third places. 

And in the commercial sector it was the Toyota Hilux ute that was top model with 59 sales, followed by the Holden Colorado that is on runout prior to the Australian brand exiting the New Zealand market at year’s end.  And Ford Ranger – which has dominated the light commercial market for several years – was in third place with a mere 29 sales. 

And here’s a stark illustration of the state of New Zealand’s rental industry: whereas usually monthly vehicle registrations number in the hundreds, in April there were just two – and they were both Isuzu N-Series trucks.

 Covid Countdown:  April’s 10 Best-Selling Vehicles

Kia Seltos                     95

Toyota Hilux                 59

Holden Colorado          38

Suzuki Swift                  35

Ford Ranger                  29

Suzuki Jimny                 28

Kia Rio                          24

Holden Commodore     23

Kia Sportage                 22

Toyota Hiace                21