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Import row confuses buyers

By

NEIL CLARKSON

Claims and counter-claims have been made about imported Japanese used cars. Proponents have tenaciously pushed their respective barrows, leaving New Zealand car buyers confused. Importers point to the generally high level of appointments of these cars and their price — usually 10 to 25 per cent cheaper than New Zealand-built equivalents.

Manufacturers and dealers who have stayed clear of the imports say there are parts problems, insurance difficulties and that the cars are not suited to New Zealand conditions. Then there are the rumours. Some say that bigger dealers buy the cars by the acre; that the cars are snatched from the jaws of the crusher; that the prices of the cars on an over-burdened market will soon crash.

Buyers are bewildered, hearing a mixture of truth, nonsense and hyperbole. During the last 18 months the number of second-hand Japanese cars shipped here has mushroomed. In January last year 247 used cars were imported commercially into New Zealand, nearly all from Japan. By May, 1988, the monthly tally had climbed above 1000 and the year’s high of 3749 occurred in

November. The 1988 total of used cars imported commercially was 20,912, about one-quarter of New Zealand’s annual new-car sales.

The 1988 total was passed in the first four months of this year with 4708 in January, 4619 in February, 5514 in March and 6391 in April.

Last week the Hansa Bremen docked in Timaru — the port handling most of the import trade through the South Island — and discharged 602 used cars from Nagoya. The cars, parked bumper to bumper, occupied about two hectares. Days later the T.A. Voyager off-loaded about 80 more. The Customs Department expects about 420 cars through Timaru this week. Another ship is due on Sunday with about 400 cars. Up to 2000 are estimated to be already bound for Timaru. Used cars, nearly all from Japan, accounted for 41 per cent of fresh registrations in the first three months this year. Many New Zealand dealers, including some vehemently opposed to the imports 18 months ago, are now selling the cars.

For some it has been a- case of facing economic reality, with the

local market depressed. Profit margins in the early days were good — better than the $2OOO margin dealers aim for in selling a used car.

The retail prices of the cars have been dropping. This happened because of the removal of import licences for cars at the beginning of the year and a reduction in duty.

Discounts of $2OOO and more are now being advertised. This would appear to result from the traditional winter lull in the market and partly from the burgeoning number of imports. Dealers are presumably still making money even given such big discounts. This has given rise to speculation that prices will crash. It would seem unlikely with profit margins already trimmed in a tight market. The rise in GST in July will eventually cause a slight increase. The question is more one of marketability than price. The reason for the cars leaving Japan comes down to economics. Japan’s Government has legislated for car obsolescence. •

Two factors contribute to this — registration costs and the Japanese equivalent of a warrant of fitness, called the Shakken.

Shakken tests are rigorous, re-

quiring cars to be returned to “original condition.” The first Shakken is usually after three years and the next at five years. After five years the cost of returning a car to original condition becomes prohibitively expensive. The Government further encourages obsolescence by raising registration costs substantially for ageing cars. The Japanese, who have a high disposable income per capita, normally opt to sell their cars and buy new ones.

Their old cars are either stripped for parts, sent to crusher plants for the metal to be recycled, or sold to buyers from New Zealand, Pakistan, Hong Kong or South Korea.

New Zealand dealers make regular buying trips to Japan. Bigger dealers have buyers living in Japan most of the year.

Cars are bought mainly from trade-in centres,'at auction or from crusher yards.

The trade-in centres and auctions offer cars still saleable on the Japanese domestic market. The New Zealand buyer is competing against the Japanese second-hand car buyer, as well as other overseas buyers. Typical prices, depending on age and condition, range from 50,000

yen (Ebout $600) to 350,000 yen (about $4200). Used cars sent from Japan must have an export certificate issued by the J.A.1.1., the Japanese equivalent of the Ministry of Transport. The J.A.1.1. test essentially satisfies Japanese pride, ensuring the export product meets a reasonable standard. The cars are steam-cleaned, sprayed underneath with a black sealant and checked for bald tyres, unsatisfactory emission, corrosion and panel damage. The Collector of Customs at Timaru, Mr Terry Burkett, estimates that only 2 per cent of the imports come with documentation showing work having been carried out to obtain a certificate.

An inspection of the Nagoya shipment at Timaru last week revealed a significant number without the export certificate. Some had worn tyres and panel damage which would have prevented a pass.

Some cars are understood to have got round the test requirement by being listed as scrap. The Japanese have since clamped down. Most of the shipment appeared to have been privately-owned cars. About one in 30 had clearly been

company cars, with writing on the panels. One appeared to have been a taxi. Two former driving instructors’ cars were still fitted with dual controls. A New Zealand buyer is unlikely to be able to establish a car’s history. The' model range is getting later, few appearing to be much more than five years old. Few oddball cars were in this shipment, perhaps reflecting the public’s concern, if not the dealers’ about getting spare parts. Badging was the most intriguing with, for example, names like Sprinter, Levin and Lime all appearing on different versions of the Toyota Corolla. Most were neat inside and free from damage to the trim or upholstery, but very few had been cleaned to showroom condition. Most, it would seem, had been bought before being offered on the retail second-hand market in Japan. All imported cars are held on the wharf until clearance is given by the Ministry of Agriculture anil Fisheries, and Customs. Customs releases the cars after clearing the documentation and receiving the duty and GST.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19890601.2.46

Bibliographic details

Press, 1 June 1989, Page 6

Word Count
1,059

Import row confuses buyers Press, 1 June 1989, Page 6

Import row confuses buyers Press, 1 June 1989, Page 6