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Electronic card spending up 1.8%

Total card spending across all industries was up 1.8 per cent in the March 2018 quarter when adjusted for seasonal effects, Stats NZ said.

Spending rose across all six of the retail industries in the March quarter. The largest rises came from the consumables (grocery and liquor retailing) industry, up $125 million (2.2 percent) and the hospitality industry, up $87 million (2.9 percent).

“The rise in retail card spending in the March quarter was driven by an increase in grocery and liquor spending,” retail manager Sue Chapman said. “

This was the largest increase in grocery and liquor retailing since December 2010 and coincided with a record increase in spending in the March month.

The motor vehicle industry dropped by 1.8 per cent or $3.2 million last month compared with February 2018. However, the vehicle industry in the March 2018 quarter was up by $7.5 million or 1.5 per cent compared with the December 2017 quarter.

 

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VW announces Herbert Diess as new CEO

Volkswagen has chosen Herbert Diess as its new chief executive in an overhaul that includes streamlining the company’s multiple car brands into just three groups while preparing its truck business for a potential listing.

Matthias Mueller’s replacement with VW brand chief Diess follows slow progress in reorganising the group’s car brands, a key pillar of “Strategy 2025” to transform the Germany’s biggest car company into a leader in cleaner cars and to move on from its diesel emissions scandal of 2015.

For Volkswagen its the biggest development since it became a multi-brand conglomerate under former chief executive Ferdinand Piech.

The carmaker said it planned to create six new business areas and a special portfolio for China, its largest market, and split its brands into three new vehicle groups with categories for value, premium and super-premium nameplates.

The “super premium” group would include sports car brands Porsche, Bentley, Lamborghini and Bugatti. Audi would be excluded from this group and form its own premium division.

Analysts welcomed the appointment of Diess, a former BMW executive who has more than doubled profitability at the VW brand since taking charge in 2015.

“Diess is a man of action, he is the most plausible choice at VW to lead the group into the next phase of its transformation,” said Nord LB analyst Frank Schwope, who has a “buy” rating on Volkswagen.

Separately, VW said works council executive Gunnar Kilian, a close aide to labor boss Bernd Osterloh, will replace group human resources chief Karlheinz Blessing who will stay at VW as an adviser. 

VW will tighten leadership duties within the group and empower the heads of the three vehicle categories to take on company-wide responsibilities.

With VW’s core namesake brand shouldering the bulk of development spending within the group, Diess will also become responsible for R&D activities across the group. Rupert Stadler, CEO of luxury division Audi will take charge of group sales.

Oliver Blume, head of sports car brand Porsche and newly appointed to the group executive board, will oversee production at the multi-brand organisation, VW said.

Diess, Stadler and Blume will also take charge of the new groups Volume, Premium and Super Premium respectively, VW said, without giving more details.

Analysts at Goldman Sachs say there is 160 billion euros worth of “hidden value” in the European autos sector that could be unlocked through portfolio simplifications.

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Drivers struggle to stay engaged

The difficulty of keeping drivers in automated vehicles engaged is a growing safety concern that has spurred several car companies, including General Motors (GM) and Subaru, to position infrared cameras in the cockpit trained on the driver to track head and eye movement.

However, U.S. safety investigators have called on carmakers to do more to ensure drivers stay engaged when using an autonomous vehicles. The National Transportation Safety Board (NTSB) has opened three investigations, two of which involve Tesla vehicles, that call into question the progress that’s been made in guarding against motorist misuse of autonomous/semi-autonomous driving technology.

Tesla has lagged behind automakers in embracing driver monitoring. While the electric carmaker still relies on technology that federal investigators said was too easy to sidestep, it’s now working on unspecified improvements to its vehicles, according to the NTSB.

“They have indicated that they have already made some improvements and are working on additional improvements,” agency spokesman Peter Knudson said to Bloomberg, in the first indication that the company is contemplating more changes to its driver-assistance system. NTSB highway investigators have been in contact with Tesla technical staff, he added.

Driver-monitoring technology is needed for any vehicle that needs humans to handle part of the driving task, said Bryan Reimer to Bloomberg News, who studies driver behaviour at the Massachusetts Institute of Technology. This includes conventional vehicles without driver-assist systems, cars that guide themselves for some periods without human inputs, such as cruise control, and self-driving cars with people serving as safety monitors.

Motorists today are bombarded by distractions, from mobile phones to in-dash navigation systems, Reimer added. “Drivers need help making better decisions.”

The NTSB is investigating two crashes this year in which Tesla drivers were using Autopilot. The system can automate steering and follow traffic in some conditions, but the company warns drivers they must monitor it at all times. The system isn’t designed to be fully autonomous and can’t detect some objects in its path, according to Tesla. 

In the most recent case, a Model X slammed into a concrete highway barrier on March 23 in Mountain View, California, killing the driver Walter Huang. His family has hired Minami Tamaki LLP to explore legal options, the firm said Wednesday in a statement.

Tesla said in a blog post last month that Huang, 38, didn’t have his hands on the wheel for six seconds prior to striking the barrier where lanes split on the freeway.

“The driver had received several visual and one audible hands-on warning earlier in the drive,” the company said in the March 30 blog post.

“What Tesla has is basically a sensor that just detects whether your hands are on the wheel,” said Mike Ramsey, an analyst at researcher Gartner Inc. “If it doesn’t detect anything on the wheel for a certain amount of time, it first gives a visual warning, then an audible warning, then the car starts slowing down. It’s somewhere in the neighbourhood of 10 seconds or longer. At 70 miles per hour, that’s a long time — a lot can happen in that period of time.”

Tesla has installed an inward-facing camera above the rear-view mirror in its new Model 3 sedan, but hasn’t confirmed whether it could be used to monitor drivers.

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Congestion causes delays

Congestion at Port’s of Auckland is at its worst in years, resulting in delays in vessel discharging. The ability of the compliance centres and storage facilities to handle this huge influx of vehicles will also have a bearing on how quickly cars can be delivered and the port cleared.

Glovis Caravel

The Glovis Caravel arrived New Zealand on April 9.

As the Courageous Ace  was still undergoing the Ministry for Primary Industries’ (MPI) deck inspections, Ports of Auckland (POAL) and MPI would not allow the Glovis Caravel to berth on original berth window of April 10.

Now the Courageous Ace has departed, the Glovis Caravel has now berthed.

The Glovis Caravel will be fogged and start MPI clearing on arrival.

Subject to MPI inspection requirements and possible delays due to yard space congestion, complete discharge of the vessel is estimated between the dates of April 24 and 28. 

Glovis Caravel V.16A
Auckland Auckland 12th– 24th/28th Apr
Wellington Tauranga 25th /29th Apr
Lyttelton Wellington 27th Apr/1st May
Nelson Lyttelton 28th Apr/2nd of May
Lyttelton Nelson 29th Apr/3rd of May
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Airbag recall responsibilities for traders

If you are a potential supplier of affected vehicles subject to the compulsory recall, it is important that you are aware of the recall order requirements, and what it means for you and your business.

From 31 May 2018, no vehicle fitted a Takata alpha-type airbag inflator may be sold in trade without having been reworked, including trade-ins.

The current most up-to-date lists of vehicles subject to the recall are available on the Government’s RightCar website:

Vehicles under mandatory recall (Takata alpha-type inflator)
Vehicles still under wider (voluntary) recall (other types of Takata inflator)

Please note: the current wider voluntary recall on other types of Takata airbag inflators may be made compulsory in the future.

VIA is currently negotiating with the MIA and NZ’s new vehicle distributors, on behalf of NZ’s used vehicle industry as a whole, on how to execute the reworking of vehicles already in service, and what the terms of this will be.

In cases where a used imported vehicle has been on-sold one or more times, the importer (as recorded by NZTA) is currently identified under NZ law as the “manufacturer” immediately responsible for ensuring that all recall requirements for the vehicle are met.

VIA will be clarifying these terms in relation to consolidated freight services, which bring in vehicles on behalf of multiple individual importers.

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VIA releases latest update on Takata recall

A technician holds a recalled Takata airbag inflator.

From 31 May onwards, vehicles with alpha-type airbags that have not been reworked will be “prohibited imports” and subject to seizure by New Zealand Customs.

Importers are urged to complete due diligence when purchasing in Japan and other source markets, to ensure that all recalls have been closed out prior to de-registration.

The inspection agencies are now working on systems to identify vehicles subject to recall, and which have been reworked, before they are certified for export.

According to VIA, it is likely that NZTA will soon require the inspection agencies to enforce section 6.4 of the Land Transport Rule Vehicle Standards Compliance 2002 as now covering safety-related recalls.

The rule states, in part, that: “A vehicle may be certified … only if a vehicle inspector or inspecting organisation has identified the vehicle and has determined, on reasonable grounds, that it is safe to be operated … [taking into account] additional relevant information of which the inspector is aware …. about the vehicle issued by a manufacturer, modifier, repairer or other relevant person.”

Click here for the full text of section 6.4.

For any questions, please contact VIA Technical Manager Malcolm Yorston on 0800 VIA VIA (842 842) or email technical@via.org.nz.

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Courageous Ace heads to Wellington

The latest update has been released on progress of the Mitsui Osk Line (MOL) car carriers; the Courageous Ace, the Cougar Ace and the Euro Spirit. 

The Courageous Ace is currently heading towards Wellington with the estimated arrival time of April 14. The vessel will then travel to Lyttelton and then Nelson. 

The vessel is also carrying vehicles from the Cougar Ace and the Euro Spirit (Nelson only). 

The updated schedule is as follows:

The Courageous Ace 
Wellington – April 14
Lyttelton – April 15
Nelson – April 16. 
 
Lyttelton Port Strikes

The Rail and Marine Transport Union (RMTU) have announced strike action in Lyttelton starting April 20 and ending midnight on April 24. 

Lyttelton Port Company have further advised that the RMTU have issued additional strike notice from April 26 ending midnight on April 29.

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Carpooling website launching in NZ

Easy As Carpooling, an environmentally friendly and economical way of travelling. Carpooling is about sharing one’s personal vehicle with other users to make a common car journey. It is a fast-growing mode of travel that complements all other forms of transport.

“Help us to build a new community of responsible travellers. In this new sharing economy carpooling has a real meaning and will be great for New Zealand,” said one of the directors of Easy As Carpooling, Melisa Cohen to Autofile.

Four French shareholders, who have been living in New Zealand for several years, have created Easy As Carpooling. After living and working in Auckland, they realised the impact of the traffic congestion on Aucklanders. So they decided to build a website that offers a carpooling service for commuters and travellers – Easy As Carpooling. 

Participation
You can choose to be the driver and share your car with other passengers who are heading to the same location. Alternatively, you can let someone else drive their car with you and others sharing the ride. Sharing a car journey can be a regular routine, a spur of the moment trip, over both short and long distances.

Why is Easy as Carpooling different from other ride sharing companies?

Easy as Carpooling are passionate about preserving New Zealand’s natural habitat. They strive to protect New Zealand’s pure and green image.

Safety is a key factor – with tools like driver and passenger ID verification, rating system, mobile and email verifications as well as ladies-only rides, all users should be safe on the road.

Three different type of rides are on offer:
●    Ladies Only
●    Road Trip Rides / Travel mates
●    Corporate Rides / Business

Click here for more information.

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UK carmakers fear trade barriers

The number of cars sold in the UK dropped by 5.7 per cent in 2017, according to industry body the Society of Motor Manufacturers & Traders. 2018 isn’t any different – ratings agency, Moody’s, predicts a further 5.5 per cent drop this year. 

“Brexit has derailed the industry,” says Sarwant Singh t0 BBC News, senior partner and global head of automotive and transportation at consultants Frost & Sullivan.

“The uncertainty causes people not to buy cars.”

Each year, about 80 per cent of the vehicles built in the UK are exported, so continued international trade relations are vital for the automotive sector’s continued prosperity.

Industry executives’ main fear is that Brexit will result in heightened barriers to trade, not only with the European Union, but with the rest of the world too, once the transition period ends on 31 December 2020.

Trading relations with China are also complicated, and may well be subject to even greater complexity in future.

“A UK-China free trade agreement will be neither easy nor clearly advantageous for the UK,” says Bruegel, a European firm that specialises in economics.

Once the UK leaves the Union, the UK will be smaller and therefore in a weaker position during trade talks, so there are no guarantees China will be prepared to offer better terms.

Furthermore, UK’s automotive trade with China, and other growing markets, could suffer, depending on the terms of a post-Brexit trade deal with the EU.

At present, EU customers buy about NZ$25 billion worth of British-made cars per year, accounting for around 53 per cent of the UK’s vehicle exports, according to the European Automobile Manufacturers Association (ACEA).

On the other hand, EU manufacturers deliver 81 per cent of the cars imported by the UK, to the tune of about NZ$75 billion, a trade imbalance that will give the UK leverage during trade talks.

At the same time, about 80 per cent of the parts and components used to build cars in the UK are also imported from the EU, while 70 per cent of the parts and components made in the UK are exported to EU countries.

“Any changes to the deep economic and regulatory integration between the EU and the UK will have an adverse impact on automobile manufacturers with operations in the EU and/or the UK, as well as on the European economy in general,” the ACEA said to the BBC.

It is therefore unsurprising that both the UK and the European car industries want to see a final UK-EU deal that retains smooth trade in the long-term.

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Uber believes AVs have a future

Uber Chief Executive Dara Khosrowshahi said on Wednesday that the ride-sharing company still believes in using autonomous technology after one of its self-driving vehicles was involved in a fatal crash in Arizona.

A pedestrian was killed after being hit by a self-driving Uber vehicle, resulting in the company to suspend testing of autonomous vehicles.

The accident has sparked conversations in the car industry about the apparent lack of safety standards for autonomous vehicles.

“We believe in it,” said Khosrowshahi, speaking at a transport forum, adding that Uber has always considered autonomous vehicles being “part of the solution.”

The company’s interest in investing in bike sharing and public transit should not be interpreted as a move away from self-driving cars, he added.

Arizona’s governor suspended Uber’s ability to test self-driving cars on public roads in the state following the crash.

Arizona had been key part of Uber’s autonomous project. About half of the company’s 200 self-driving cars and a staff of hundreds were located there. 

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Slowdown predicted

The prediction by Winston Peters of an economic correction or slowdown, made at the time of last October’s coalition announcement, appears to be coming true.

Infometrics Chief Forecaster, Gareth Kiernan

Infometrics’ latest forecasts see New Zealand’s economic growth slowing to 2.4 per cent per annum by the end of this year and slipping below two per cent a year during 2019.

A range of factors have combined to drive the slowdown, many of which can be sheeted back to government policy.

Changes in infrastructure priorities will result in a 2.9 per cent contraction in government investment spending between now and September 2019, which is a sharp contrast from the growth that had been predicted prior to the election.

“The dumping of major roading projects in favour of rail and public transport initiatives will create a near-term hole in government investment,” says Infometrics’ chief forecaster, Gareth Kiernan.

“It is possible that some of the slack might be picked up by infrastructure projects as part of the provincial growth fund, but the slow wheels of government mean it could be 2020 before investment spending really recovers.”

Housing market uncertainty could also limit economic growth over the next year as the government clamps down on foreign buyers of residential property and capital gains rules for investors.

Although the market has been stimulated somewhat from the start of 2018 by more relaxed loan-to-value restrictions, developers remain cautious about pushing ahead with new projects given these areas of uncertainty and cost pressures in the industry.

And all indications are that KiwiBuild will provide a smaller and more delayed boost to residential construction than the government has suggested.

The current economic slowdown will amplify the effects of policy changes on migration during 2019 and 2020. Infometrics forecasts that the annual net inflow will ease from 68,900 currently to below 17,000 by early 2021.

This slowdown in population growth will mitigate some of the demand pressures in the Auckland housing market, but the region’s housing undersupply and affordability issues are likely to remain critical.

“We are not arguing that some of the changes being introduced by the Labour-led government, around transport policy, housing, or migration, are not necessary or well-intentioned,” says Mr Kiernan. “But it is becoming clearer that the transition phase could result in a less buoyant performance by the economy over the next couple of years.”

The lack of progress on spending in the near-term is likely to be counterbalanced by faster growth over the medium-term. Infometrics predicts that GDP growth will average 2.1 per cent a year between mid-2020 and mid-2023, a stronger performance than had previously been on the cards.

There will be some catch-up in government investment spending as infrastructure projects get underway, while more expansionary fiscal policy is also likely to be reflected via faster growth in government consumption.

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