N.Z. car fleet rejuvenated

Press, 30 November 1989, Page 31

N.Z. car fleet rejuvenated

By

CRAIG DOWLING

New Zealand used to have the reputation for being the place old Morris Minors came to die. This slight on the country’s aged car fleet has become less valid in recent years as imported, late-model Japanese used cars have flooded on to the market. Now it would be more appropriate to say that New Zealand provides the twilight in the lives of cars from the Land of the Rising Sun. The question is: How long will the twilight last? Figures from the Canterbury region of the Licensed Motor Vehicle Dealers’ Institute show that membership has dropped from a peak of about 300 a couple of years ago, to about 250. And the importation of large numbers of second-hand Japanese cars has been blamed for putting some of the yards but of business. . .. . “It is always hard to pin down' the exact reason for a business closing — although it generally relates to an inability or an unwillingness to compete in the market,” one dealer said. “Generally the dealers who have gone have been the ones who do not like the new environment — or who have failed to adapt to the new environment,” he said. . “Basically the environment itself is healthy for the used car dealer and the used car buyer.” The dealers who appear to

have been worst affected are those caught with stocks of older model relatively expensive cars, and who have failed to upgrade. “It was not long ago when New Zealand provided one of the oldest vehicle car-parks in the civilised world,” said the chairman of the LMVD Importers’ Association, Mr Martin Todd. "Now these old cars are just being disposed of, or are selling for what they are worth — which is next to nothing.” The latest figures from the Customs Department show that used motor vehicle imports from Japan have skyrocketed during 1989 — mainly through commercial dealers. In 1987 only 2541 second-hand cars were brought into New Zealand. But with the relaxation of import restrictions this figure jumped to a total of 21,280 Japanese cars in 1988. By October this year that figure had doubled again (to 48,190) and observers say the end of year figure should pass : 60,000. v “I do not think there is such a thing as saturation point in the market, but there is a plateau,” Mr Todd said. “However, I do not think the plateau has yet been reached. “The 60,000 cars are certainly not sitting around in a paddock somewhere — the dealers are moving them. If anything I would say there is currently a bit of a shortage at the top end of the

market.” Cars were getting harder to buy in Japan because New Zealand dealers were looking al more recent models, said Mr Todd.They were now competing with the Japanese domestic market and New Zealand prices were not likely to fall much further. The impact of used car imports on local market prices has been considerable. The Auto- . mobile Association has estimated a 15% slump in value for low mileage cars, but up to 40% slashed off the price of high mileage cars by the competition. For pre-1980 New Zealandassembled cars with high mileage, the AA estimated a price drop over the last two years of between $3OOO and $4OOO. Japanese used car imports goi off to a bad start in New Zealand with back-up service and sparepart supplies often lax. But these problems have been largely overcome by the large number of cars coming into the country, and the fact that dealers, having to offer warranties, have taken over the market from the private importers who blazed the trail. Though some dealers have been forced under in what essentially has been a rationalisation process, new car yards are still opening up. Autoparts International, a Christchurch based spare-parts dealer with Japanese links, plans to enter the car sales market

before Christmas, specialising in “top-end” used Japanese cars. The managing director, Mr Athol Asher, said the move was a logical extension of the company’s business. "In fact we are in the fortunate position of having all the back-up and parts facilities already in place,” Mr Asher said. “We still see room in the market for carefully selected top quality cars, and that is what we will deal in.” Mr Asher said his firm's Japanese interests looked closely at the New Zealand market before deciding to move into it. “They do not take any business decisions lightly — so I will back up their interpretation of things.” It seems the trade in used cars from Japan is not a new one — only relatively new to New Zealand. Mr Todd said the rest of the Western world has taken the cast-offs for twenty years or more. The reasons were two-fold, he said. First, very strict and expensive warrant tests were faced by Japanese on cars just a few years after construction. For many Japanese the money was better spent on upgrading to a new model, he said. Second, in a country where car production profoundly influenced the economy, there was social pressure to. keep up with the latest models.