NZ car sales weather the storm

NEW-VEHICLE sales in New Zealand did not plunge as low as feared in 2008, with a 4.9 per cent fall over 2007 for a 97,185 total.

Big percentage drops for smaller brands were offset by strong numbers for the big sellers, including the clear market leader Toyota.

Although SUV sales dropped 16.8 per cent, new passenger sales lost just 1.7 per cent over the previous year.

The used-import market had the biggest decline. In 2004, about two used imports were sold for every new car. In 2008, the numbers were close to even, at 99,711, and used imports are expected to halve again over the next 12 months.

In new sales, large, sports and luxury car sales declined as buyers moved to the light segment, which logged a 19.2 per cent increase year-on-year.

But small cars are NZ’s biggest sellers with 19.8 per cent share of the market, ahead of light cars on 12 per cent and large cars on 11.9 per cent.

That is bad news for the Holden Commodore, which is no longer NZ’s biggest seller after dropping 31.6 per cent in the past year – a large part of Holden’s 20 per cent plunge.

It holds second spot on the model charts at 4150 sales behind the Toyota Corolla (6645) and ahead of Suzuki’s Swift (3452).

It was a good year for some brands: Skoda rose 79 per cent on the back of a big government order Maserati increased 73 per cent by doubling its model range and Fiat climbed 53 per cent thanks to the Ducato van and the 500 light car.

But these are niche brands. Look to the mainstream and Suzuki’s 27.7 per cent increase was the biggest of any top-10 brand.

Left: Suzuki Swift.

Suzuki NZ marketing general manager Tom Peck told GoAuto: “Our secret is the small-car market grew most and that’s where we live. For many years it was a handicap, now it’s a strength, and going forward it looks a good position to be in.” Suzuki also claims to have made some judicious introductions. “Swift XE introduced a cheaper model and added 1000 sales, nearly all private,” Mr Peck said. “We priced it at about the top end of used-car pricing, so some looking at imports added it to their shopping list.” Sedan and two-wheel-drive SX4 sales also contributed to the increase, despite fewer fleet or business sales than the previous year. Suzuki is now in eighth position overall, up one place on last year.

Mazda’s sales last year rose 9.1 per cent to consolidate its No.4 position. Mazda NZ managing director Andrew Clearwater credited the updated Mazda6 and a strong line-up for its ninth consecutive year of growth.

The winners have one thing in common – new models to draw buyers into showrooms. Those in freefall were mostly brands relying on character, fashion or aspiration for their appeal. Alfa Romeo dropped 32.5 per cent, Mini 19.9 per cent, Lexus 32.6 per cent and BMW 25.3 per cent.

Reductions were less dramatic for those fielding small cars (Daihatsu was down 5.4 per cent), or with a strong range to smooth out the losses at the upper end. Ford, for example, was down 10.4 per cent.

The Blue Oval brand remains optimistic things will improve with new Fiesta due soon, while Subaru (down 20.5 per cent) must be hoping its recently launched diesels will halt the plunge, and Kia and Nissan – both losers in 2008 – also expect new models to turn the tables.

What has caused all the upheaval? Toyota NZ’s general manager of sales and operations, Steve Prangnell, cited fuel prices (“SUVs came back with a wallop over the year”) and the global financial crisis and its impact on the NZ dollar (“which raised our imported costs over 50 per cent so we’re forced to raise prices in a declining market, which is hardly a formula for sales success”).

Not that it prevented Toyota from topping the market again, its sales equalling Ford and Holden combined to take a 21 per cent share, its highest since 1994.

In used vehicles, Toyota’s Signature Class used brand, still fifth overall behind Mazda, also fell. Signature boss Spencer Morris attributed the dramatic plunge in used imports to exchange rate falls, the introduction of emissions regulations, and increased competition at auctions in Japan.

But Independent Motor Vehicle Dealers Association CEO David Vinsen disagrees. He told GoAuto that emissions regulations changed what dealers buy, and argued that increased competition for available cars – headed by Russia – is not a factor now it has increased its import tariffs by as much as 400 per cent.

“The driver is the economy – demand has dropped as private buyers leave the market,” he said. Bottom-end prices had risen, and the top end has collapsed. He confirmed the used import market this year would be half 2008’s figure.

However, he does not believe dealers will suffer. “They’ll reduce their stockholding, cut staff, do what it takes,” he said.

“It’s the volume-dependent service providers which will see the impact the inspection and shipping companies, ports and trucking companies will suffer with such a dramatic drop in volume.” New-car industry predictions are not as black as Mr Vinsen’s. NZ Motor Industry Association CEO Perry Kerr estimates anywhere from a 5 to 30 per cent reduction this year, with Toyota’s Prangnell picking around 18 per cent.

“I don’t think the market has bottomed out yet,” Mr Prangnell said. With almost one in four cars sold in NZ being Toyotas, he says the brand will concentrate on customer service, and will “hunker down, weather the storm and hope to come out better than we went in”.

NZ Top 10 2008:
Rank	Make	Sales	% Share
1	Toyota	21,430	22.1%
2	Ford	12,191	12.5%
3	Holden	9206	9.5%
4	Mazda	7816	7.4%
5	Nissan	5853	6.0%
6	Mitsubishi	5803	6.0%
7	Honda	5761	5.9%
8	Suzuki	5683	5.8%
9	Hyundai	4720	4.9%
10	Volkswagen	2234	2.3%

Source: New Zealand Motor Industry Association