Blog Archives

Isuzu’s long-term dominance

Isuzu Trucks have cemented their dominance over the New Zealand market by achieving an unprecedented 18-years as number one.

Colin Muir, General Manager.

“Since the year 2000, Isuzu Trucks has been the top selling truck brand in New Zealand, which is an unprecedented achievement,” said General Manager of Isuzu Trucks New Zealand, Colin Muir.

“There are very few brands in the entire automotive industry, even considering a global perspective, which can claim such dominance.”

Isuzu Trucks and its dealers achieved 1,305 registrations for the year, which is a new record – beating the old record which was set only last year. 

This resulted in Isuzu enjoying a 25.6 per cent share of the new truck market, meaning just over one of every four new trucks sold were from the Isuzu brand.

“The quality, performance and all-round durability of Isuzu Trucks has contributed to this ongoing success, as has a dealer network which is really stepping up in terms of exceeding customer expectations,” said Mr Muir.

“We’re really excited about our prospects heading into 2018, especially with a new offering in the Euro dominated HPMV tipper market with the newly launched 500+ HP CYZ530 6×4.  We have every confidence we can continue this remarkable run of form.”

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Sharp drop in business confidence

There has been a steep drop in business confidence following last year’s General Election, according to the latest NZIER Quarterly Survey of Business Opinion.

The report states that 11 per cent of businesses are expecting economic conditions to degenerate over the first half of 2018 due to uncertainty over Government policies.

Previous QSBO surveys have shown business confidence tends to fall after Labour takes office, in contrast to a lift in confidence when National takes office, but the effect on actual activity has been muted.

However, the bout of pessimism was not reflected in activity indicators. Domestic sales remain solid in the retail and manufacturing sector. The building sector also reported solid output and new orders.

Across the main centres, the pessimism was most evident Wellington and Canterbury. In particular, a net 33 percent of Wellington businesses expected a worsening in economic conditions over the coming months.

There is also a weakening in profitability, with a net 7 percent of businesses reporting a decline in profitability over the past quarter. 

Weaker confidence and profitability is affecting business investments; only a net 2 percent of businesses plan to invest in new buildings, a sharp drop from 18 percent in the previous quarter. Hiring intentions are also lower, despite solid hiring in the past quarter. These developments point to a softening in growth over the coming year.


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Best year ever for imports

2017 was the best year ever for imports with 331,641 new and used passenger and commercial vehicles entering the country – a 10.2 per cent increase compared to the 300,976 that arrived in 2016.

This was down to vehicle import numbers increasing in three out of the four import categories last year:

Used car imports accumulated to a massive 171,543 for 2017 – the highest it has ever reached. This was an increase of 12.4 per cent on 2016’s total of 152,676. 

New light commercials also had a stellar year with a 26 per cent increase on 2016, from 29,852 to 37,614 units. 

New passenger vehicle imports were also up with 115,019 units imported into the country in 2017 – an increase of 3.7 per cent on 2016 when 110,940 crossed the border. 

Used light commercial vehicles was the only segment to decrease in numbers, with 7,465 units imported – a 0.6 per cent decrease year on year compared to 2016. 

For the month of December, 13,097 used cars were imported, with Japan taking a 93.78 per cent of the monthly share – with 12,283 vehicles imported. Australia followed with 435 and a 3.32 per cent monthly share. Meanwhile, 150 vehicles were imported from Great Britain, with 1.15 per cent share of the monthly aggregation in used passenger vehicles.
Imports from Japan made the biggest gains in 2017 – monthly averages were some of the highest we had ever seen, with a huge 18,426 vehicles being imported back in March. 

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EV population to reach 3m

The number of electric and plug-in hybrid cars on the world’s roads will pass the 3 million mark, as manufacturers go full-speed on developing and producing battery-powered vehicles.

EV-Volumes, a Swedish group focuses on plug-in vehicle sales development, including; products, prices, batteries, charging infrastructure, regulations and incentives.

They have predicted sales will accelerate next year and bring the total number of battery-powered cars on the roads to around 5 million by the end of 2018.

EV Volumes said that China, the world’s biggest market for electric cars, was in the “global driver seat” when it comes to growth. Beijing is pushing drivers to buy electric with a suite of incentives, as it attempts to tackle its climate change and fuel emission problems. 

Japan is also leading the way, owing its return to growth to the start of the Prius Prime, and with the imminent introduction of the new Nissan Leaf, sales can only go higher.

VW, which overtook Toyota as the world’s biggest carmaker in January, is among rivals who have recently set electric car sales goals, also targeting 1 million a year albeit by the earlier date of 2025. 

Toyota also said that it aimed to launch a new generation of batteries in the early 2020s that would enable electric cars to travel further, using solid-state technology that allows batteries to be cheaper, safer and offer more capacity.

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Japan’s export growth accelerates

Japan’s exports grew for a 12th straight month in November as external demand continued to fuel the nation’s longest stretch of economic growth since the 1990s.

The value of exports rose 16.2 per cent from a year earlier, the biggest increase since August. The 16.2 percent export growth beat a 14.6 percent annual gain forecasted by economists. 

The trade surplus was 113.4 billion yen (NZ$1.4 billion).

In terms of volume, Japan’s exports rose 5.5 per cent from a year earlier, the 10th consecutive month of rises.

The data backs the Bank of Japan’s optimistic outlook for the Japanese economy, the world’s third largest.

Shipments to Asia, which account for more than half of Japan’s exports, grew 20.4 percent in the year to November to 3.89 trillion yen, the record amount.

Exports to the United States rose 13.0 percent in the year to November, led by cars and excavators, following a 7.1 percent gain in the previous month.

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China’s new energy vehicle sales double

Compared to November 2016, China’s vehicle sales in November rose 0.7 per cent to 2.96 million vehicles, making it the sixth consecutive month of gains, according to data from the China Association of Automobile Manufacturers, (CAAM). 

China’s vehicle sales in November rose 0.7 per cent to 2.96 million vehicles.

That took year-to-date volume to 25.8 million vehicles, up 3.6 percent from the same period a year ago.

According to CAAM, sales of new-energy vehicles (NEV) in November rose 83 per cent from a year earlier to about 119,000 vehicles.

NEVs refer to all-electric battery vehicles and plug-in petrol-electric hybrids.

While November marked a sixth consecutive month of gains, one of the CAAM officials said China’s auto sales are set to grow “no more than 4 percent” this year, weaker than the 5 percent annual growth forecast at the outset of the year.

Sales of new-energy vehicles (NEV), meanwhile, rose 83 per cent in November from a year earlier to about 119,000 vehicles amid a government push to support the sector and shift away from traditional petrol-engine cars in the long term.

Sales of new-energy vehicles (NEV) in November rose 83 per cent from a year earlier amid a government push to support the sector.

NEV sales in the January-November period totalled 609,000 vehicles, up 51.4 per cent from the same period a year ago.

China’s policymakers have set strict production and sales quotas for NEVs which automakers must meet starting in 2019, a move that is prompting an increase in electric car deals and new launches of electric and hybrid models as firms ensure they do not fall short. 

Furthermore, Chinese banking authorities announced new loan policies to allow buyers of new-energy vehicles to borrow a larger portion of the purchase price.

Starting in 2018, NEV buyers can borrow up to 85 per cent of the cost from banks, up from the previous 80 per cent.

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Subaru breaks all-time record

Subaru of New Zealand has recently sold its 3000th vehicle in 2017, which is a record-breaking year for the All-Wheel Drive brand.

There has been remarkable demand for the new generation Subaru XV model, which was launched several months ago.

Subaru of New Zealand’s Managing Director, Wallis Dumper says even though we haven’t reached the end of the year, the sales have far exceeded last year’s totals.

“We are 27 per cent ahead year-on-year from 2016 in comparison to the automotive industry. We are still awaiting the November industry figures, which were up by 10 per cent last month.” Mr Dumper says.

The star of the Subaru fleet is the Outback, with nearly half of the total sales achieved by this model in 2017. After a stellar year in 2016, it has again exceeded sales expectations to currently sit 15 per cent ahead in 2017.

Last month, Subaru sold 316 vehicles, which is 35 per cent ahead compared to the same period last year.

There was also major demand for the new generation Subaru XV model, which was launched several months ago. It has seen an unprecedentedly high number of the stylish SUVs being snapped up by Kiwi drivers – with 138 units sold last month.

This is the most sales of the XV model ever in a month – a huge 306 per cent increase from November 2016, which confirms that the Subaru XV really has taken off in the market.

“The high number of XVs flying out of Subaru Authorised Dealerships means we do not have enough supply to keep up with demand but are doing our best to rectify this for our customers,” Mr Dumper says.

“In response to the unprecedented demand for our eight-model range of Boxer-engined beauties, Subaru of New Zealand have received more production allocation from Japan,” he adds.

Mr Dumper also credits the Authorised Subaru Dealer network for their efforts and assistance with growing the Subaru brand.

“We were targeting this never-achieved-before figure of 3000 sales at the beginning of the year and couldn’t have done it without our 16 partners across New Zealand. Being able to do it with a month to spare really is a credit to the hard-working people we have stocking and selling our Subarus around the country,” Mr Dumper says.

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Vehicles lead the way in imports

New Zealand’s two-way trade with APEC reached $102 billion for the year ended September 2017, Stats NZ said today, with vehicles leading the way in imports. 

APEC, the Asia-Pacific Economic Cooperation, forum involves 21 Pacific Rim member economies, including Australia, China, and the United States – three of our main trading partners. It is Asia-Pacific’s main economic forum where a number of trade agreements are reached. 

“Asia-Pacific is the fastest-growing economic region in the world,” international statistics manager Tehseen Islam said.

“Over the last decade, New Zealand’s two-way trade with APEC has grown $31 billion, and a $2.6 billion deficit is now a $4 billion surplus.” 

Talks regarding the Comprehensive and Progressive Agreement for Trans-Pacific Partnership are currently underway at APEC. Eleven of the 21 APEC countries are in the trade talks.

In the September 2017 year, New Zealand had a $4 billion surplus with APEC, most of this down to the$3 billion surplus with China  – we exported $53 billion worth of goods and services to APEC, and imported $49 billion.

New Zealand’s main imports from APEC are vehicles, machinery, and equipment.

New Zealand imports a large amount of cars and trucks from Japan, Thailand, the US, and South Korea, all of which are APEC nations.

New Zealand imported $2 billion worth of electrical machinery and equipment from China in the September 2017 year, and nearly $4 billion worth of mechanical machinery and equipment from China, the US, and Japan combined.

Travel spending also contributed to the trade surplus. Visitors from APEC nations provided $9 billion to the New Zealand economy in the September 2017 year through exports of travel services, mainly by visitors from Australia, China, and the US.


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MTF prepares for disruption

Motor Trade Finance’s underlying annual earnings dropped 7.6 per cent, meanwhile both of its sales and market share increased.

Overall net profit rose to $7.5 million in the year ended September 30, compared to the previous year where MTF landed on $7.2 million.

However after removing tax the underlying profit actually fell to $7.3 million compared to $7.9 million in 2016.

After introducing various initiatives, MTF has had “a very buoyant year” where sales have jumped 36 per cent to $567.4 million.

Last November MTF introduced the non-recourse lending partnership with Turners Automotive Group which allows franchisees and dealers to sell vehicles to people with higher credit risks.

The company said its market share rose to 13.6 percent in the year from 11.6 percent in the prior period, and non-recourse lending contributed $58.6 million in sales in the year.

Usually non-recourse receivables are not included on the company’s balance sheet as they are funded by Turners; however the company included as they are generated through its business channel.

The advent of car-sharing, autonomous vehicles and new technologies means the vehicle industry is in for a big disruption. In order “to reflect and encourage broader asset lending,” MTF will drop references to vehicles in its branding.

“The worldwide speculation surrounding disruption in the areas where we operate, being the automotive and financial markets has intensified over the past year,” the company said.

“What we do know is that our markets are set for change, and while the extent and pace of this change remains unclear, we know we must position ourselves to adapt early and not wait to react.”

The board declared a 7.37 cent dividend, payable on Nov. 30. That brings the annual payout to 13.37 cents per share, down from 13.96 cents per share in 2016.

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EV sales hit record high

Electric vehicle, EV, sales jumped to a record high in the third quarter of 2017 due to China’s increased demand.

Electric vehicle sales hit record high in Q3

Sales of EVs and plug-in hybrids exceeded 287,000 units in the three months ended in September, a huge 63 per cent higher than the same quarter last year, according to a report released by Bloomberg New Energy Finance, BNEF.

China is the top market for EVs, making up roughly half of global sales in this quarter. Europe and North America were the second and third biggest markets, respectively.

It’s no surprise that China’s number one due to their current incentives to help increase the number of low-emission cars on the road.

BNEF forecasts that international electric vehicle sales to exceed one million units in 2017.

The market for electrified transport is starting to increase as charging infrastructure becomes more accessible.

“The Chinese government is very focused on pushing up EV sales,” advanced transport analyst at BNEF, Aleksandra O’Donovan said.

“One reason for that is the local pollution levels in the cities, and a second is for China to build domestic heroes to compete internationally in this market,” O’Donovan added.

“The national subsidies can make EVs up to 40 percent cheaper than regular internal combustion cars,” O’Donovan noted.

Automakers including Volkswagen Group, Daimler, Jaguar Land Rover and Volvo have recently announced plans to expand their line-ups to include EV models to meet growing demand.

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Job opportunities increase

Job opportunities for labourers and machinery drivers are on the up according to recent figures from the Ministry of Business, Innovation and Employment (MBIE).

As of September 2017, there was a steady increase of 0.4 per cent and 9.6 per cent increase in job advertisements over the whole year.

Labourer occupations have risen by 1.1 per cent and machinery driver roles increased by 0.9 per cent. Overall, the largest increase was in the low-skilled occupation (up 0.5 per cent).

Over the month, the strongest growth was in Otago/Southland (up 1.3 per cent), followed by Gisborne/Hawke’s Bay (up 0.9 per cent).

“Over the year, the number of vacancies increased in all ten regions,” says MBIE’s Labour Market Trends manager Nita Zodgekar.

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