Imports fuelling growth

A drop in the yen is fuelling “incredible demand” for used import car sales in New Zealand, but an economic research firm is predicting a slow down over the coming months. Infometrics says easing new car sales, and business and consumer confidence falling, are factors that will slow the car market over the coming months. Used imported car registrations of 11,290 in August were up by 31 per cent on the same month a year earlier. First-time registrations of used imports had reached 122,120 so far this year, the highest since in December 2007. “The incredible demand for used imports continues to be fuelled by a significant weakening of the Japanese yen,” says Infometrics. In the three months to July, the Kiwi dollar bought an average of 88.04 yen – up from 79.64 a year earlier. More new commercial vehicles were registered last month than in any other August and 7,083 new passenger vehicles were also sold – the most for the month in nearly a decade. Infometrics says car registrations overall are now at the highest level for an August since 2006. Monthly new car sales have grown at rates higher than 10 per cent year-on-year in the early months of 2014, but slowed to 3.7 per cent in August. “With the New Zealand dollar likely to have now peaked, and consumer and business confidence having fallen over recent months, we anticipate new car sales will plateau as 2014 draws to a close,” it says. However, the research firm still expects car sales will be at least 207,000 annually for the next five years – more than 218,000 were sold in New Zealand last year. “Ongoing weakness in the yen is still likely to support growth in sales of reasonably priced used imports.” New Zealand’s statistics are in stark contrast to new car sales in Australia, which show new vehicle purchases fell for the eighth consecutive month in August, with declines in all states and territories. Australians bought 88,157 new cars last month – down from 93,336 in the same month of 2013 – with the market now down 19,307 units in the first eight months of 2014. Research recently revealed new car affordability is at a 38-year high across the Tasman.