NZ sales take 29 per cent hit

NEW Zealand new-vehicle sales fell 29 per cent to 6508 in January, with market leader Toyota taking a 38 per cent hit as the Japanese company’s NZ sales fell from 2085 units in January last year to 1290 this year.

Ford, with a sales decline of 15 per cent to 869 units year-on-year, gained market share to 13.35 per cent, jumping into second place over Holden which suffered a 27.3 per cent sales decline to 811 units for a monthly share of 12.46 per cent.

The biggest loser was Mitsubishi, whose sales slumped 71 per cent, down from 598 vehicles in January 2008 to 170 this year. Its share was just 2.6 per cent – down from 6.36 per cent in January last year.

As well as a decline in new-vehicle sales, used imports plunged 38 per cent to 12,161 in January compared with a year ago.

Toyota’s sales decline was compounded by a collapse in rental sales, from 818 in January 2008 to 486 in the same month this year, helping to drive the Toyota overall market share down from 22.18 per cent a year ago to 19.82 per cent in January this year.

Mitsubishi’s 598-unit total in 2008 included 100 rental sales, but even that does not account for a drop to 170 sales in January 2009.

The CEO of Motorcorp – the distributor of Jaguar, Land Rover, Volvo and Renault in New Zealand – Wallis Dumper said: “We had planned for a tough first quarter. The January result doesn’t make a year, but sets the scene for what we think will be a tough and challenging year.” He forecast significant price rises to come – delayed as slow January sales mean current stock must sell before cars priced at the latest exchange rate.

Other industry insiders also predict trouble ahead as companies that ordered stock in more favourable conditions last year were faced with extremely high inventories, while market numbers could fall further when overstocked dealers’ reduced prices begin to settle.

Nissan NZ’s marketing operations manager Peter Merrie told GoAuto the dramatic drop came because “the market’s gone to hell in hand basket like the rest of the economy”.

But he also said buyers were frightened of price rises. “What people have tended to do is wait to January to get new-car registrations which brings January up. This year it was reversed – because of the price increases which were well known for most people, which brought some sales forward into December.” Honda NZ marketing chief Graeme Meyer agrees, but said Honda’s transparent pricing – which means buyers know the date and amount of price rises in advance – is an advantage as it makes the buying decision easier, and that certainty “is certainly helping us”.

Economist Gareth Morgan Buyers said buyers were worried for their jobs and reluctant to commit to big-ticket items.

Suzuki NZ CEO Bill Grice is anticipating a steady year rather than a dramatic decrease, certainly for Suzuki.

“We intentionally keep reasonable stock,” he said. “If you amortise your costs you can hold your prices better than anyone who’s clearing stock out each month, as anything they bring in they’ll pay for at the new rate.

“That gives us an advantage at these times, as it lets us hold the price longer without hitting us too much on the bottom line.” However, there was a limit to how long such a strategy could work.

Distributors are taking a close look at their model mix pending February’s figures, which will confirm whether January’s numbers were an aberration – or the harbinger of worse news to come.

Credit crisis claims NZ dealership WELLINGTON’S largest and oldest dealership, Williams and Adams, is under a cloud – a probable victim of the international credit crunch.

The financial situation of Williams and Adams has sent a shiver through the New Zealand motoring industry, for alongside Suzuki, Renault, Volvo, Jaguar and Land Rover it holds the franchise for Holden – one of the nation’s top three marques – and affiliated brands HSV, Hummer and Saab.

Holden NZ managing director Simon Carr told GoAuto in a written statement: “Williams and Adams is continuing to trade as normal.” According to PricewaterhouseCoopers (PwC), Williams and Adams is not in receivership – a state in which a company can avoid liquidation by running under a court-appointed trustee – but under liquidation. It is continuing to trade while PwC considers its options.

PwC partner John Fisk cited the slowing economy for the company’s situation – and the effects of having vehicles financed by third parties.

Suzuki NZ CEO Bill Grice told GoAuto: “Williams and Adams was excellent for us. Top three in sales and they’ve looked after the customer well.” Mr Grice believes the withdrawal from New Zealand of finance company GMAC was a contributing factor.

“GMAC is a big American company and NZ is obviously dictated to by the US,” he said.

Attempts to obtain comment from GMAC on the closure failed. However, sources have told GoAuto that GMAC applied pressure to the dealer to accept extra Holden stock, a move that backfired when sales plunged and GMAC pulled out.

Top 10 NZ Brands January:
Rank	Make	Sales	% Share	Jan 2008 %
1	Toyota	1290	19.82%	22.18%
2	Ford	869	13.35%	10.83%
3	Holden	811	12.46%	11.87%
4	Mazda	506	7.78%	6.80%
5	Honda	358	5.50%	5.00%
6	Hyundai	345	5.30%	4.47%
7	Nissan	332	5.10%	6.03%
8	Suzuki	289	4.44%	6.39%
9	VW	212	3.26%	2.80%
10	Mitsubishi	170	2.61%	6.36%

Note: New-vehicle sales only.
Source: New Zealand Motor Industry Association