New-car stockpiles go as sales rise

Press, 5 December 1978, Page 3

New-car stockpiles go as sales rise

PA Wellington; A surge in new-car buying; | in recent months has smashed mid-year pre-1 (dictions of doom for the in-! Idustry and melted the multi-; : million dollar stockpile held i by assembly companies at; I the start of the year. ( A turnover of 75,000 isi (expected this year — 10,000( ; more than the Government! (estimated, and wanted the! industry restricted to, | it eased hire-purchase regu-! Rations in February. i In February, two assembly; (plants — General Motors! (and Todd Motors — had a! icombined stockpile of 2300; (unsold cars with a market! (value at that time of more; | than SI7M. Naw, the General Motors’; stockpile has vanished, and! ; the company has a waiting; ; list for its six-cylinder Holdens. The 1000 cars stockpiled! by Todd’s in February have; gone, and stocks are now at; the normal planned level.; (said the company’s manag-( ;ing director (Mr J. Todd); (yesterday. A General Motors spokes-; (man said yesterday that the; motor assembly industry | was experiencing quite ah; upswing, “but whether this will be short-term or longterm we cannot be sure.” ; “We are building all thej

cars we can. Certainly not, < at the volume of 1972-73,j’ i which was one of the peakjs (periods, but we have been] I bringing up production since (i ' June,” he said. ! ( ( “We have a waiting listji (for Holdens, and we are now'; ; in a very much healthier sit- (1 nation. There is no doubtii (about that.” (: i Ford Motors has never!’ (stockpiled. The company!’ (produces to dealers’ orders,; (and these have been increas-ii ing. I ; The New Zealand Motorj Corporation in February re-! I (leased no details of its!; (stockpiling, except to report i jit to be “grossly excessive.” ! The reason for the surge'e | was not the hire-purchase! relaxation given by the Gov-' i lernment, said the president;! (of the Motor Vehicle Deal-1; ;ers’ Institute (Mr J. Alexan-ji der). He believed companies i< land private buyers held backji (over the last few years byjr i the costs and restrictions on 11 ; vehicle replacement had;! (been forced to renew this! (year. ;* Forecasts within the in-(< Idustry of new-car sales this ; i year ranged from 70,000 to s ; 75,000. ; In Auckland, a former < i member of the Prime Minis- 1 j ter’s “think tank,” Mr L. B. ' I Bullen, said he considered I the big over-capacity in the i

i car-assembly industry a (waste of the country’s re-1 (sources. | Mr Bullen, a Forest Prod- ; | ucts’ executive who was seconded to Mr Muldoon’s special advisory group, was ■asked by the Prime Minister (to investigate the car inidustry at the end of last I j*bar because “the economic I viability of some parts of it I (were suspect.” I “I believe that the study; !indicated just that,” he re-; ported. j According to Mr Bullen, I the state of the industry had’ (not changed since then. “No; signs that 1 can see tell me I that this is likely to! •change,” he said. ! “The motor-vehicle in(dustry in New Zealand is at; (the turning point. I am not (sure, however, that the in-! idustry realises it.” ; He said that if the inIdustry did not make major! I changes, either the Govern-; Iment would make changes! (for it, or it would “go; (broke.” I He suggested diversification in the car parts, :even if it meant getting away from motor vehicleassociated products. Mr Bullen said the car industry had a capacity about three times the market size. The demand for cars created by a rapidly increasing population had ended, and he considered the new-car market would stay about 65.000 cars a year in the foreseeable; future. “The debate going on within the Government is whether some kind of Gov-!' ernment action should be taken to force ratio-; nalisation, or whether to let| market forces take care of.; (it,” Mr Bullen said. “My I own view is to leave it.l I alone and let the market de-; icide who stays in business! land who does not. The risk; jof the Government’s taking 1 • some action is, I think, a; ; little less than it was last; (year, but it is still there.” According to Mr Bullen,! ■ the manufacturers and deal-! (ers were sadly led astray! ■ when they were given to be-1 ; lieve that the market would stay at the 100,000 level of; 1973. ( “The fact was, of course,; ! that the Labour Government ■ ■ introduced a boom because jit had promised to get rid ofj ; rackets and it had plenty of ’ (foreign exchange,” he said. j Over-capacity, as well as ( ! being a waste of the coun-1 ; try’s resources, was a waste i from the manufacturers’ (point of view.