Consumer confidence hits demand

The biggest factor influencing the volume of vehicles coming into New Zealand is consumer confidence.

And that’s despite all the legislative changes that have been happening, says David Vinsen, chief executive of the Imported Motor Vehicle Industry Association.

“Consumer confidence is made up of things such as interest rates, the wealth factor in people’s homes, and people being told what’s going to happen and what they then expect to happen,” he told Autofile Online.

“If people are concerned about the future, their jobs, interest or mortgage rates, rents or any other macro influence, then they might be pulling in their horns and not buying cars as discretionary purchases.

“People will still buy vehicles that need to be replaced or address a specific transport need, such as a child leaving home, but they won’t be changing their cars for the next new thing.

“This won’t change until things settle down and people get a better handle on how any shift in the economy is going to affect them.”

Vinsen, pictured, notes that in a “normal year” before Covid-19, the used-imports industry would bring in about 150,000 units so “we’re considerably down from that number” for 2022.

“The demand for transport doesn’t go away entirely. It just gets suppressed temporarily by macro factors, such as consumer confidence or recession.

“Demand for vehicles doesn’t stop, people just wait. This means that at some stage in the future things will likely rise again because there’s no prospect of a sudden improvement in public transport across the country, so people will always need a private vehicle.

“New Zealand is a long, skinny country with difficult geography and topography, and has generally got pretty poor public transport. This means there will always be the demand for privately owned and privately operated vehicles.”

As for when the number of used imports will get back to levels seen in previous years, “who knows”.

Vinsen adds: “Volume is important because the used-vehicle industry is volume-driven, and we’ve spent 35 years squeezing all the inefficiencies out of the process, removing unnecessary intermediate steps and charges.

“There’s a certain point when it’s not going to be sustainable for everybody, but we don’t know where that point is. We’ll wait to see how the market changes, but we’ll also be prepared to be nimble and adjust.

“It’s going to be a fraught time and we don’t know yet what all the challenges will be. There will, however, also be opportunities.”