Vehicle sales inch slowly back into the faster lane

The new passenger vehicle market in New Zealand is showing signs of climbing out of the worst recession in decades - but it is not likely any time soon to return to the historical highs of the past, like the 103,00 sales in 2007 and 97,000 last year.

"An annualised rate of 75,000 to 80,00 units over upcoming years is a prudent level to base a business plan on," says Mazda NZ managing director Andrew Clearwater.

He expects sales this year of new cars and commercials to total around 69,000 units and says the days of car plants turning out vehicle after vehicle and distributors loading dealers with demonstrator models are over.

Companies are resizing their businesses to meet the needs of a more conservative economy, he says.

"Our projections are realistic, particularly if you look at the number of new vehicle registrations in the past which seemed to end up on used-car lots, giving an unrealistic impression of strong new-car demand," he said. "In the future, there will be a more market-driven approach to vehicle production, against what I call a factory-driven approach."

Such an environment, he says, will in theory allow more buyers to order a car tailored to their tastes. "There would be delays because New Zealand is far away from assembly plants. But there are costs to be saved everywhere - you pull them out of the factory as well."

Clearwater says that although the market seems to have bottomed out, the industry cannot expect the Government to introduce a scrappage scheme to kick-start sales and get older, less fuel-efficient vehicles off the road.

"Government trialled such a scheme in Christchurch and Wellington. But with a subsidy of a handful of bus tickets as an incentive to take part, it pales in comparison with the support [from governments] in other markets to get clunkers off the road."

Many European Union countries have a scrappage scheme in place.

The United States has already spent US$1 billion ($1.5 billion) on its cash-for-clunkers programme and President Barack Obama has asked Congress for a further US$2 billion.

Sales of new cars and commercials last month were up 3.8 per cent over June. New Zealand Transport Authority figures show 4473 new passenger vehicles were registered in July, compared with 4306 units in June.

"This shows a modest, continuing trend of increasing new passenger vehicle sales from a major low in April this year," says Motor Industry Association chief executive Perry Kerr.

But sales of commercial vehicles slumped 30 per cent in July compared with June.

"However, one positive aspect of the new commercial vehicle market is that the July registration total of 1267 units is the third best month this year, so that is relatively encouraging in the longer term that vehicle sales are tracking upwards," says Kerr.

July's commercial vehicle numbers included the first sales from Chinese carmaker Great Wall Motors. GWM sold 35 duel-cab utes to rank eighth among commercial distributors.

Toyota, Ford and Holden are the top three marques in both the new car and commercial vehicle sectors. Year to date, Toyota's overall market share of 19.3 per cent compares with Ford on 12.4 per cent and Holden on 9.2 per cent.

The Toyota Corolla continues as the country's best-selling model in 2009 with sales of 2066 units, ahead of the Holden Commodore with 1544 units and the Suzuki Swift with 1419.