PRICES OF USED VEHICLES

Press, Volume LXXXIII, Issue 25178, 8 May 1947, Page 6

PRICES OF USED VEHICLES

REPORTED DISCUSSIONS ON CONTROL PLAN . TRADE OPPOSITION TO PROPOSALS Control over the prices of secondhand motor vehicles is being considered by the Government, and, according to reports from Wellington, the .Price Tribunal is preparing a formula for implementing suitable measures. Inquiries made, by “The Press” by telephone in Wellington yesterday showed that the New Zealand motor trade is opposed to any such control. The trade believes that control would create a black market and dperate effectively only against reputable companies which have established offices and accounting systems. The contention is that control will play into the hafids of the already numerzous “backyard** dealers. It has been suggested that dealers in second-hand vehicles should be restricted to a profit of 10 per cent, on the prices they have paid for vehicles, plus an allowance for any repairs. Some other method would be required for private sales. Trade circles stated yesterday that there had been a great deal of com-r ment about alleged sales of new-model cars soon after their acquisition by the original purchasers, who had been claimed to be snaking considerable profits in this way. However, it was stated, probably no morS than a dozen new vehicles had changed hands thus throughout the Dominion. 'Freer Marketing Wanted The New Zealand motor trade now holds the view that the time for emergency controls and regulations is past, and that the proper solution of the used car price problem would be to make new vehicles more freely Available. The trade considers that, the Used car market would then find its own level. It is admitted by the trade that the prices of new vehicles to-day are high, but the sales tax and higher costs in the manufacturing countries are the cause. Dealers’ profits are controlled on a basis which gives the same “per £” profit on particular typts aS before the war. CMrs, sold before the war at about £3oo. to-day return the same profit to dealers, though their actual selling prices may have increased by JOO per cent.

Sales of New Cars Trade organisations have asked all dealers to request new car buyers to give a personal undertaking not to resell theif cars within 12 months, except to the original suppliers. This is an effort to prevent exploitation of the demand for new vehicles. The contention of the trade is that the Government should concentrate on freer marketing of vehicles, rather th&n the introduction of price control measures. Australia, several years- ago. implemented a scheme of “peg prices,” and its operation, New Zealand trade circles state, has shown that such a plan is not desirable. No similar system has been introduced in the United Kingdom. * Motor organisations are now seeking an opportunity of discussions with the Price Tribunal on the problem. More than two years ago. successful representations were made to the tribunal at 'a time when the -Government was considering similar action to that now inquiries were made yesterday at the Christchurch office of the Motor Trade Association no comment on the proposals was available.