Logistics boss fears vehicle stock shortage
A lag in activity is hitting the logistics and shipping sectors of the imported car industry with warnings it may soon lead to a shortage of stock for dealers.
Ken Quigley, managing director of Jacanna Customs & Freight, says while general activity in the automotive industry appears to be encouraging following the easing of coronavirus restrictions, other parts have become “very quiet”.
He told Autofile Online many of the vehicles that arrived in New Zealand during the lockdown period were already on their way here, or in the process of being prepared for shipment, when those restrictions kicked in.
Quigley, pictured, says that while the nation was at Covid-19 alert levels three and four, the buying of vehicles at auctions in Japan plummeted and that lack of activity was now being felt by logistics companies.
Further impacting trade was the declaration of states of emergency for all Japan’s prefectures at a time when New Zealand started shifting to lower alert levels.
“We’ve been very busy on the general cargo side of the business and importing has been strong during the pandemic, but we are starting to notice the lag effect of six weeks where people were not buying much,” says Quigley.
“Japan has had its lockdown, the auctions have been quiet and people here were nervous so didn’t ship anything. Now the market has bounced back and I can see there being a shortage of stock in the next two months.
“Other parts of the supply chain may be getting busier at this time, but our slowdown is now. We had six weeks of slower business that we will never replace, it’s like Stink Bug 2.0.”
Despite the present lull in activity, Quigley is upbeat about the long-term prospects for the industry. He doesn’t expect the damage to the economy to be as bad as many forecasters have predicted, while some businesses in the automotive and logistics sector will not survive the effects of Covid-19. “It won’t be doom and gloom for everyone.”
He explains that even if unemployment hits 9.8 per cent in September, as predicted by Finance Minister Grant Robertson in his budget speech, there will still be more than two million people working in New Zealand and needing to buy vehicles.
“Talking to my customers, it appears the market in general has bounced back pretty well. I’m pleasantly surprised. Car auction prices in Japan were quite low for some time, but that has also bounced back well, which indicates people are buying again.
“Likewise, in New Zealand, if there was real uncertainty among people I wouldn’t think they would go out to buy cars, but they have so perhaps they don’t feel their jobs are too threatened.
“Volume is going to be down and sales will level off. Going from level four, to level three and then two was like a Christmas period because everyone could go out again and spend money, which they hadn’t been able to do for some time.
“Looking further ahead, a lot of New Zealanders who were planning to spend money on overseas holidays may now spend that money on upgrading cars or renovating their houses, so there will be positives. Just because our borders are shut to tourists that won’t ruin us.”
