Brakes will go on car-buying spree soon

Press, Volume CXV, Issue 33959, 27 September 1975, Page 1

Brakes will go on car-buying spree soon

(By

the motoring editor)

Christchurch motorists ’ are buying new- and J used cars at almost rec- ’ ord rates in an effort to, beat rising prices. But as supplies of cars at I pre-devaluation prices have'i almost dried up and sub- ; stantial price-rises lie ahead,' it is likely that sales will ■ soon fall sharply. Some of the new prices have already been announced: ! the four-door 1300 cu. cm .Escort has just gone from 1 I $4388 to $4743, and there could be another hike of 6ii

to 8 per cent in the next couple of months. The Datsun 120 Y saloon has risen from $4334 to $4748, and this pattern is being repeated throughout the market. Dealers say that the price rises are likely to be in three ' parts, and the present rises are only part one. The factors involved are freight increases, wage increases, and devaluation. The wage and materials cost increases come from outside New Zealand as much as from inside the country. Among the big cars, the i3.3-litre Falcon six has just

gone from $5520 to $5798, while the “old” model Holden Kingswood at $5400 will be replaced by a model that is likely to cost more than $6600. Meanwhile in the used-car market, prices are also on the way up. Dealers say that cars less than three years old have risen $lOO to $2OO in the last month or so. But the prices are likely to rise more, for dealers say that many of today’s used cars are selling at” bargain prices in relation to replacement costs. “Even a $lOOO used car

must go up in price by at least $lOO in the next few months,” one experienced used-car dealer said. Some regular new-car buyers have switched to latemodel used cars, including luxury models, rather than pay the new higher prices for new vehicles. Some business firms are trying to beat the new prices by buying late-model used vehicles too. But generally the new prices are not discouraging buyers: “Obviously there’s still a lot of money around, although it’s in people’s pockets, and not the accounts

of companies,” one dealer said. "Many firms are short of cash.” But when further price rises come, almost certainly well before Christmas, many dealers expect the buying boom to fade badly, and some of them regard the prospects for next year with trepidation. This is partly because they can see their profit margins shrinking: in spite of rising prices and costs, they say that their mark-ups are static. However, the general view is that once the full impact of the coming new prices is

felt — and by then, even fairly ordinary small fourcylinder models will be around the $5OOO mark — there will be no shortage of new cars for sale, although there will be a shortage of buyers. The Government will try to keep local production up to preserve employment, but built-up imports may be cut back further.

The price of petrol Is not the bogey many thought it would be and dealers report a good demand for sixcylinder cars, and a steady

demand for VBs. They say that even if the price went to 28.6 c a litre ($1.30 a gallon) motorists would soon come to accept it. It seems obvious that the end of price rises for new and used cars is a long way off. and that in 12 months today’s prices may seem like bargain rates. People will go on buying cars, but the present mini-boom has almost run its course, and will be replaced by a sluggish and price-conscious market.