The prognosis for new vehicle sales is bleak and post-lockdown recovery will be a long road.

SALES to essential services have helped some new vehicle distributors since coronavirus hit New Zealand, yet the industry fears April will deliver the lowest registrations count on record.

The tally anticipated might be just 10 percent of the count for April of 2019 which at 10,640 units established a new high water mark for the industry.

If that outcome eventuates it will be the worst in living memory, an expert says.

This scenario and thought that even after the Covid-19 all-clear is given it will be many months before a new vehicle trade currently in complete shutdown in respect to public trading regains the same level of vitality enjoyed before coronavirus, has been expressed by the distributors’ organisation.

Comment from David Crawford (pictured), the chief executive of the Motor Industry Association, comes after release of March data signalling passenger and light commercial (meaning ute and van) registrations were down 4954 units, a 37.3 percent decrease, compared to the same month last year. In all 8317 new vehicles in those categories were registered compared to 13,271 in March of 2019.

The commercial sector lapsed far more than passenger; already in decline, it almost halved (down 40 percent, 1945 units) compared to March 2019. Even though the Ford Ranger remained the most favoured product, in category and overall, it did so with just 444 registrations – half its usual monthly tally.

Toyota remained the overall market leader with 18 percent market share (1515 units), also topped for passenger and SUV registrations and saw its RAV4 position as the best-selling passenger car, albeit with 318 units. Interest in Holden vehicles seems to have lifted in wake of General Motors’ announcing the brand will be gone by year-end; Holden car volume was perky and its Colorado was the third most popular ute.

Year to date, the passenger market is down 15.6 percent (6075 units) on the same period in 2019.

Supply constraints factored but, obviously, the swift move into shutdown, which took effect at midnight on March 25, also effectively reducing March to a three-week trading month in which the ‘vast majority’ of business was conducted, Crawford says.

With April set to be effectively wholly impacted by the Level Four enforcement, it’s only going to worsen, he adds. But how bad can it get?

“We think April could be as low as 10 to 15 percent of last year. The only thing that has been sold at the moment are vehicles required for essential services operations.”

That has brought some business. “I’m aware, for example, of a district health board requiring 40-odd vehicles. But there’s just these little spots of activity.

“But we’re expecting April to be probably the lowest month in living memory.”

The MIA has been collating data since 1975.

Some distributors have laid off staff but the industry is not at a point where operability has ceased, but there is recognition that for some the bills will be piling up. Distributors often have to buy product in advance of delivery and, even if that doesn’t happen, once landed cars are subject to goods and services tax.

“So everyone is working hard on cash flow. It is a testing time.”

Even though most of the world’s vehicle makers have frozen their assembly lines, there is product in the pipeline that might sustain demand if and when it picks up.

However, at present a number of vessels are set to off-load vehicles here over the next few weeks.

The MIA is pleased this seems to set to happen.

“There has been some discussion with officials about can and cannot be done. The ship will have vehicles and parts and some of those will be required for essential services activity.

“It doesn’t make economic sense to the industry or the Government for those ships to be turned away.”

He says procedures put in place by Ports of Auckland that Government is content with for the time being will allow vehicles to be off-loaded then sent to containment, Crawford says.

That will allow access to vehicles on an as-required basis during the lockdown which, he personally fears, might well extend beyond a April 22 release.

The longer it is in place, the more severe the impact could be. But even then it is not as simple when it is lifted, he says.

The disruption to the global vehicle industry will inevitably means that some products will be subject to delayed availability.

“There are stocks around but these will be cleared and it’s the availability of new stock beyond that which is going to be patchy.”

Even if New Zealand is deemed free of the virus, it is very likely our borders will remain closed for travel, which has obvious implications on the national economy.

“The recovery of vehicle sales going forward is going to be dependent on how quickly New Zealand can recover.

“We think it is going to be a slow, fragmented and painful recovery.”