3600 More Cars Available For 12 Months

Press, Volume C, Issue 29535, 9 June 1961, Page 12

3600 More Cars Available For 12 Months

(NJi. Press Association) WELLINGTON, June 8. About 3600 more cars should be available in the next 12 months as a result of the production incentive scheme incorporating a greater New Zealand-made content in cars assembled here, said the Minister of Customs (Mr Marshall) tonight. In addition, it is estimated that about 1000 further cars may be imported as a result of the new policy recently announced for noremittance lieences. This is in compliance with undertakings given during the General Election and earlier this year that the number of cars available for the public would be increased in an effort over a reasonable period to meet the demand which has been unsatisfied since the war.

An increased New Zealand content of about 10 per cent, has been obtained by the greater use of locally-made parts and by a higher proportion of assembly work in New Zealand on imported components. The production incentive scheme was put to the motorcar assembly companies last year on the basis that if the New Zealand content was increased by certain proportions a specified increase in the basic allocation of licences would be provided The motor-car assembly companies have carried out their side of the bargain and the Government is now honouring the arrangement for its part* ■ Raw Materials An increase of 10 per cent in the New Zealand content of the cost of a car means that more cars can be imported for the same amount of overseas exchange. In making this calculation allowance has to be made for any imported raw materials required for making parts for assembly in New Zealand. The scheme, will, however, mean a considerable saving in the overseas exchange content of each car The amount of additional exchange to provide for the increased number of cars was, therefore, much less than would ttherwise be the case, said Mr Marshall.

The Government has taken j into account both the short- j term and long-term effects of i this arrangement, on the j overseas funds position and < also the undesirable results of : the present shortage Of new i cars. I It must also be borne in ; mind that the amount allocated for car imports is still i considerably less than it was 1 in 1957 though licences for : many other imports were at i the 1957 leyel. “The Government is seek- ; ing to and the unsettling cycle of severe cuts in car imports and then relaxations when our overseas funds - position eases," said Mr Marshal] today. “An easy way to reduce expenditure In a .period of strain on those funds is to limit motor-vehicle imports, and a serious shortage has been the result. What we are trying to do is achieve a balanced flow of new car imports from year to year at a reasonable level. Older Models “Although statistics suggest that New Zealand is well off for private cars, half the 515,000 registered are eight or more years old" These older models created extra problems in traffic hazards, and in high maintenance costs again involving overseas funds for increased imports of spare parts, he said “The shortage has been

particularly severe on motorists with no urge-n business requirements for cars, and for intending owners who! cannot offer a trade-in” said: Mr Marshall. "Another re-| suit has been the undesirable premiums prevalent on the| second-hand market “All these problems can! really be solved only by! having enough cars to go| round, and a steady flow of I new cars coming into use’’l Even with the increase now possible. 1961 car imports would not reach the 1957 level, said Mr Marshall. New registrations in 1957 were 41.452, in 1958 29.058. in 1959 26.307. and in 1960 32.409, said Mr Marshall. The Government had had hopes, he said, of a much greater increase in imports, of both built-up and completely knocked-down cars, to meet current demands, overtake the shortage and do away with the evils attendant on that shortage. "This remains our longterm objective when the overseas funds position permits. and the step now taken sets the pattern for achieving that aim.” said Mr Marshall. "Stability" “It will give stability to the assembly plants, stimulate efforts to increase the New Zealand content still further and. as our exchange position improves, will enable a steady increase in cars available without having to catch up on such a backlog as has developed following previous overseas exchange difficulties.” said Mr Marshall. At the same time, the assembly companies would be encouraged to provide locally for even more of their requirements and so reduce the cost of imported components still further. “We are also examining other proposals designed to increase the number of cars available for the public but the shortage of overseas funds is at present a limiting factor," he said. • Mr Marshall said proposals put forward for special loans or credits in financing car imports had been found to be unacceptable. The motor companies were, however, co-operating with the Government by trying to arrange to spread payment for the overseas content of cars so as to relieve pressure on overseas funds at times when the normal seasonal fall in exports brought those funds to their lowest point. Some publicity had been given, he said, to a proposal to establish in New Zealand an assembly plant for Czech , cars. The sponsors of this i plan had been advised that the scheme could not be . agreed to by the Government, said Mr Marshall.