Manufacturers face slump in car sales

Press, 9 October 1982, Page 11

Manufacturers face slump in car sales

New Zealand's car manufacturers face rising stockpiles of new cars after a post-Budget slump in sales. The president of the Motor-Vehicle Manufacturers’ Association. Mr D. McDonald, said that assemblers were reviewing staff levels. He said that a postBudget sales fall-off had been expected, but sales had dropped more than expected because of the price and credit freeze. A spokesman for Toyota New Zealand. Ltd. in- Wellington. said that the situation at the Sockburn assembly plant in Christchurch was no different from that in other parts of New Zealand, but he declined to say whether staff cuts would be necessary. Potential buyers might be under the impression that prices would drop next year because of the recent Industries Development Commission draft report recommendations on changes to the industry, but what was more likely was that there would be a substantial price increase. especially if the volume of production dropped, forcing overhead costs up which would have to be passed on. the spokesman said. Mr McDonald said that

some of the options being examined by some companies included voluntary resignations. shorter working weeks, relocation of staff, and non-replacement of staff. The industry believed the market would pick up. but it was a question of when. The president of the Canterbury branch of the MotorVehicle Dealers' Institute. Mr Allan O'Keefe, said that while August new car registrations were down 13.8 per cent compared with August last year, the total new car registrations in the period to the end of August this year was only 3.6 per cent less than the same period last year. The boom in new car sales before the Budget had been a "false” one. with buyers afraid of value-added tax and sales tax increases. A post-Budget slump could only be expected after the boom, said Mr O’Keefe. The I.D.C. report was purely a discussion document and there was no guarantee that its recommendations would be implemented by the Government. He said that the latest tax cuts could help to balance the effect of the gradual tightening of credit. ,