Industry welcomes ‘certainty’

New-vehicle sector boss says end of the clean car discount will bring more stability to businesses.
Posted on 17 October, 2023
Industry welcomes ‘certainty’

The Motor Industry Association (MIA) is welcoming clear policy direction for the new-vehicle sector with the clean car discount (CCD) expected to be cut from legislation by the end of this year.

Axing the feebate scheme was an election pledge from the National and Act parties, with the former saying the policy would be gone by December 31 if it got into power.

National and Act are set to form a coalition government, although they may also require the support of NZ First depending on the final election results that are due to be announced on November 3, once special votes have been counted.

Aimee Wiley, MIA’s chief executive officer, says knowing in advance National’s CCD policy and timing is welcome because it ends uncertainty and allows distributors and their dealer networks to plan for the months ahead.

“Overall, the industry is fatigued from constant policy change and certainty and stability will be welcomed,” she told Autofile Online.

“We are looking forward to a business-as-usual situation without frequent policy and associated rate card changes disrupting the market.

“The good news is that we aren’t waiting weeks for a new government to be formed to then understand policy impacts associated with a change in government.  

“National has been clear about ending the CCD and by when. Industry can now plan for the removal of CCD and immediately move forward.”

A surge in consumer demand for vehicles that currently attract rebates is expected until the end of the year, with people holding off buying models that attract fees over the same period.

Wiley, pictured, notes that pattern is likely to be reversed in the first quarter of next year once the CCD has gone but adds sales over the coming six months should “even out” overall. 

“Whether people welcome the CCD change or not, the general sentiment among our members is they welcome clarity of policy change. They can now plan and move forward with some certainty for the six months ahead.”  

Wiley is also keen to begin a review of settings for the clean car standard (CCS) early in 2024 after National said in the build-up to the election it will keep the system but wants to make sure its goals are achievable.

“National has said it will work with industry to review and adjust the CCS targets, noting it’s a legislative requirement for targets to be reviewed by June 2024,” she adds.

“We’re looking forward to working with the government and the team at the Ministry of Transport to review future CCS targets.

“The MIA wants to ensure that future targets set are achievable for industry. It is important to set targets that strike the right balance between achieving necessary environmental decarbonisation goals while also ensuring that vehicle supply, market competitiveness, vehicle affordability and supply isn’t jeopardised in the medium-long term.”

Working with government

The Motor Trade Association (MTA) says it’s too early to comment on the election result and the implications for its sector, with the exact shape of the next government yet to be determined.

However, spokesman Simon Bradwell notes MTA is on the record as advocating for the phasing out of the clean car discount and using the clean car standard “to do the heavy lifting”.

“We believe the CCD effectively rewards consumers who can already afford an EV, and has failed as a self-funding model,” he explains.

“We look forward to working with the next government on all areas that affect members, including immigration and labour matters as well as automotive.”