Vehicle import prices plunge

Import prices for vehicles, parts and accessories tumbled more than $800 million – or 37.5 per cent – in the September 2020 quarter when compared to the same period a year earlier.

Latest figures from Stats NZ show the prices for that category hit $1.38 billion between July and September this year and accounted for 7.6 per cent of all imports.

This compares to $2.21b in the same quarter of 2019, and 9.5 per cent of the import market. 

A breakdown of the numbers shows the prices for cars and parts from the European Union (EU) and Japan both plunged by more than $200m over the same period.

The price of vehicles, parts and accessories from the EU fell from $628m in the September 2019 quarter to $420m in the latest three-month spell. At the same time, the value of such imports from Japan dropped from $640m to $414m.

Thailand accounted for $170m of vehicle imports in the September 2020 quarter, down from $332m the year before.

Overall, import prices fell 3.7 per cent and export prices tumbled 8.3 per cent in the September 2020 quarter, resulting in a terms of trade fall of 4.7 per cent. 

The terms of trade measures the purchasing power of New Zealand’s exports abroad and is an indicator of the state of the overall economy. A fall in the terms of trade means the country can buy fewer imports for the same amount of exports.

Spending on travel – domestically and internationally – also played a big part in the latest set of numbers.

Kiwi travellers’ overseas spending in the September 2020 quarter fell to $324m, which is almost $1.7b, or 84 per cent, less than the same time last year.

As global travel has slowed to a trickle because of Covid-19, spending by overseas visitors and students within New Zealand also dropped by half to $1.5 billion.