Flood pressure on supply

The chief executive of Turners Auto Retail is expecting the used-vehicle market to experience some challenges in the coming weeks as demand jumps because of last month’s floods.

“We anticipate there will be a surge in demand for cars arising from this awful situation in the Auckland region, but there won’t be an increase in the supply of vehicles,” says Greg Hedgepeth.

“The supply of used imports is down year on year in terms of sales and cars coming into the country, and that may create some demand pressure on used vehicles in general coming through over the next few weeks.

“Turners isn’t reliant on imports. That’s only a small part of our business. But parts of the market that do focus on imports may find it challenging as stock levels for some businesses are already tight.”

Hedgepeth describes the company’s stock position as “good” across all its branches. It’s prepared for a “demand surge” and he feels comfortable in this regard about what may happen in the coming weeks.

“Used-car prices have increased in the past couple of years. Depending on when people bought their cars, getting a like-for-like replacement might be challenging in terms of achieving the same price level.

“Because of the clean-car changes over the past year, a lot of cars that once came into the country and economically made sense previously aren’t being imported anymore. Those cars that are less fuel efficient won’t be available or there will be far fewer of them but there will be lots of cars, such as the Toyota Aqua.

“We may see problems for people coming out of larger imported cars and looking to replace like for like because they won’t be able to get exactly the same option today.”

Hedgepeth told Autofile Online he imagines thousands of vehicles will need to be replaced “given so many houses have been red-stickered and those houses will have had cars on the driveway that may have been written off”.

He adds: “We were fortunate in that we didn’t have any damage to cars or branches. We’ve invested a lot of money into new branches, and had to comply with all the latest drainage and run-off requirements. The branches are well set up to handle very heavy rain. It looks like they have done their job.

“Part of our business involves selling damaged vehicles to be used for parts. We are working with insurance companies to handle the influx and have a dedicated yard in Wiri that can handle 1,000 cars and additional space has been secured for any extra volume over the coming weeks. We also have a project team in place dealing with this issue.”