Record March despite supply disruptions

Vehicles are fast-tracking to customers.

Toyota Hilux was the top-selling model in March.

CONSTRICTED new vehicle supply continues to hamper distributors – though last month’s registrations count might suggest otherwise.

Last month 15,498 new vehicle were registered. It’s the highest March count since record-keeping began back in the 1970s.

That this tally represents a massive 86.3 percent up on the same month last year is easily explained – the country went into the Covid-19 Level 4 in March of 2020, so distribution, sale and delivery was highly restricted. April last year was also bleak, with 1039 registrations, a 90 percent fall on April of 2019.

Last month’s accrual follows a record February, when 12,488 registrations were notified. Year to date the market is up 27.6 percent (9046 units) compared to the first quarter of 2020.

And all this is despite supply disruption, resultant from Covid-19 though a global shortage of semiconductor is also influencing. This is a rebound from manufacturers having cut chip orders as vehicle sales fell last year. They have found themselves at the back of the queue when the market rebounded. The entire global car industry buys about $US37 billion worth of chips.

“A year on from our first Covid-19 lockdown, our sector is still operating under disrupted supply arrangements and supply shortages,” says David Crawford, chief executive of the distributor organisation, the Motor Industry Association.

“As shipments arrive, vehicles are going straight through Customs, distributor pre-delivery inspections and entry compliance, to the franchised dealer and on to the new owner, who invariably has been on a wait list.”

Most popular vehicle last month was the Toyota Hilux, which continues to enjoy buoyant sales following a massive facelift late last year. In March it recorded 1019 registrations to claim a 19 percent share of the commercial market. Arch-rival Ford Ranger accounted for 828 sales to sit in second spot, with Mitsubishi Triton third on 691.

In the passenger segment the Mitsubishi Outlander again led the way with 467 registrations, comfortably ahead of the Kia Sportage, Mazda CX-5 and Toyota RAV4.

Of the total of 15,498 registrations, 424 (2.7 percent) were pure electric vehicles. There were also 150 PHEVs and 855 hybrids sold during the month.

Toyota remains the overall market leader with a 15 percent market share, followed by Mitsubishi on 11 percent and Ford on nine percent.

Clean car ambition timeframes challenged

New vehicle distributors agree the CO2 count has to fall, but say the pace of proposed change will be problematic.

NZ-new EV availability is ramping up, with this BMW iX (above) among confirmed 2021 entries, but the industry points out that left-hand-drive markets are prioritised, which hurts planning for this country.

NEW vehicle importers support a clean car standard but believe the mooted deadline of 2025 is impossible to achieve and have labelled electric vehicle uptake forecasting as a fantasy.

The Motor Industry Association, which speaks for new car distributors and has more than 44 members covering 81 different marques, is more partial to a 2028 deadline, as suggested in a Climate Change Commission report.

However, it is also particularly scathing of the commission’s considerations about the pace of EV uptake in New Zealand, saying its modelling “enters the realm of fantasy and wishful thinking.”

This is the MIA’s biggest concern, though it is also questioning the agency’s projections about when EVs will achieve price-parity with conventional internal combustion engine vehicles, saying that forecast is also seriously awry. Predictions of low emission vehicles also run ahead of what the MIA believes is possible.

“We consider that the commission’s target of 50 percent of vehicle imports to be electric by 2027 are overly optimistic, as are the projections for price parity.”

It highlights that the world’s EV makers are primarily concerned with meeting demands in markets where hard-and-fast deadlines for reduced emissions and ICE car availability has been established. It also points out that with the exception of the United Kingdom, which plans to ban new ICE cars from 2030, these are predominantly left-hand-drive markets, so as result production for right-hand-drive countries is limited at best.

The Association also believes the commission undervalues the role of carbon sinks, synthetic fuels – that could keep internal combustion engine (ICE) vehicles in circulation - and hydrogen technologies.

The latest comment comes after a number of high-profile local distributors, including Toyota New Zealand and European Motor Distributors – which holds rights to all brands held by Volkswagen Group, an electric vehicle production juggernaut likely to overtake Tesla next year (yet is unable to begin supply to NZ until 2023) - have called on the Government for a feebate scheme to sit alongside its clean car legislation, fearing that without it new EVs will struggle to see similar demand.

The MIA’s criticisms and alternate proposals are contained in a comprehensive report responding to the Government having announced, in January, an emissions standard which, if approved, will take effect from next year and also the commission’s subsequent draft report lending opinion about what it believes New Zealand must do.

The deadline for submissions about these matters is today.

The Government’s standard will require new and used car importers to meet incrementally lower emissions targets, falling to 105 grams of CO2 per kilometre average by 2025, from a present average of 171g/km.

The commission has subsequently recommended the Government deploy an end-date for petrol and diesel internal combustion cars, proposing 2032 as appropriate.

In a covering letter to the MIA’s submission, chief executive David Crawford says new vehicle importers supports need for cleaner vehicles, but says the timeline for a lower CO2 average is too rushed.

“Unfortunately the Government’s timeline of 2025 is impossible to reach with resulting penalties becoming a financial impost against all new vehicles including low emission vehicles.”

“Additionally, the transport policies in the draft report focus on vehicles entering the fleet which is only a small portion of the in-service fleet. We need policies to focus on not just only those entering the fleet, but also to target existing vehicles. This will garner a faster rate of emission reductions than just focusing on vehicles as they enter the fleet.”

Additionally, the transport policies in the draft report focus on vehicles entering the fleet which is only a small portion of the in-service fleet, he says. 

“We need policies to focus on not just only those entering the fleet, but also to target existing vehicles. This will garner a faster rate of emission reductions than just focusing on vehicles as they enter the fleet.”

In an executive summary, the MIA says the commission should have been “more technology agnostic, and not favour one technology over another, but enable the transport industry to develop innovative solutions” to meet reduced CO2 targets.

Crawford says the commission’s thought that technological breakthroughs will be crucial to enable the agricultural sector to reduce its greenhouse gas emissions does not give consideration to the potential for new technological breakthroughs for the transport sector.

David Crawford.

“The MIA believes the (commission’s) draft advice report needs to give greater weight to the role that synthetic fuels (including e-fuels) could play in reducing emissions from the current ICE fleet.

“ ….we also consider the report has underplayed the potential for hydrogen propulsion, not only for heavy vehicles but also light, in addition to battery technology. There is also no evaluation of the role e-motorcycles/scooters can play in reducing emissions.”

It believes discussion of ICE bans is premature if synthetic fuel can be produced. It suggests the country should invest in the production of such ‘e-fuels’  “and we have an opportunity to do so.

“For example, once the extension to the Tiwai Point aluminium smelter contract has run its term in 2024 then that electricity could be utilised to make e-fuel to lower emissions of the entire NZ fleet of light and heavy vehicles.”

It also moots the use of wind turbines to assist in the creation of hydrogen, a process which is already signed off for trial, and is excited by the development of second generation biofuels which are sourced from various bio-stock (wood, for one) to make a crude bio-oil from which petrol and diesel can be produced.

In a recent commentary, Crawford noted “these second generation biofuels are known as ‘drop-in’ fuels which are 100 percent compatible with existing ICE engines and fuel management systems.”

Landmark ladies of motoring

These women helped shape automotive history.

Beatrice Shilling’s story is one of two wheels and wings.

MOTORING has felt like a man’s world for as long as many of us can remember, with men dominating roles across the industry.

By latest estimate, just 0.04 percent of mechanics in the were females, just six women have got behind the wheel for a Formula One Grand Prix weekend, and a mere two of taxi drivers are women.

To acknowledge March 8 being World Women’s Day, today’s story highlights the achievements of pioneering female figures in motoring. (This material was provided by insurers Hegarty’s and USwitch).

Beatrice Shilling

An engineering genius, motorbike racer and World War II hero … Shilling’s story is one of two wheels and wings.

In 1932, when she graduated from the University of Manchester with an honours degree in engineering, she was listed as ‘Mr’ on her student record card, female titles were not yet a recognised option.

In 1934, she became the second woman to be awarded a Brooklands Gold Star when she recorded two laps at over 101mph, and later became the circuit’s fastest female racer ever with a lap speed of 106mph.

When World War II broke, Shilling was working for the Royal Aircraft Establishment.

Her invention of a restrictor valve that prevented RAF Spitfires and Hurricanes from stalling and falling from the sky during steep dives, saved the lives of many pilots, and arguably helped win the Battle of Britain.

Odette Siko established Le Mans records that remain unbeaten.

Odette Siko
This Frenchwoman made motorsport history as the first woman to race the Le Mans 24 Hours on the 21st June 1930.

Competing alongside Marguerite Mareuse in a Bugatti T40, they made it home in seventh position – a result that’s yet to be beaten by an all-female team.

In 1932 Siko claimed fourth spot overall and class win aboard an Alfa Romeo 6C 1750 with Louis Charaval – another record finish for a woman that still stands today.

Minnie Palmer

In 1897, Minnie Palmer became her own chauffeur.

Distinguishing herself as the first woman in England to drive and own her own car, the American-born actress took delivery of a French-made Rougemont automobile.

It was 31 years before women achieved the same voting rights as men, but Palmer’s move proved that the sexes could be equals behind the wheel – a significant milestone on the road to the social and political emancipation of women.

Dorothee Pullinger, at far left, with the Galloway, a car designed for women.

Dorothée Pullinger

An  engineer and entrepreneur, who designed a car for women, built by women.

She’d been refused entry to the Institution of Automobile Engineers on the grounds that “the word person means a man and not a woman” – a decision that was later reversed.

By the early 1920s Pullinger was manager of Galloway Motors, a car factory run by a female workforce that adopted the colours of the suffragettes. An on-site engineering college offered women apprenticeships that lasted three years, rather than the usual five for men, because it was believed women were faster learners. Pullinger designed and developed the Galloway – the world’s first car specifically for women.

Gear levers were placed inside rather than outside the car so that they were easier to reach, the seat was raised, storage space was added, the dashboard was lowered, and the steering wheel was smaller. It was also one of the first automobiles to introduce a rear-view mirror as standard.

Dorothy Elizabeth Levitt

The first British female racing driver who set records and taught royals how to drive, Londoner Levitt was described as “the fastest girl on earth” when she set a new world speed record for women of 91mph.

She did it in a six-cylinder Napier during a speed trial at Blackpool in 1906. Three years earlier she had been garlanded with the title of Britain’s first female motor racing driver, and also set the world’s first water speed record when she achieved 19.3mph in a 40-foot steel-hulled, Napier-engine speedboat.

In 1905, she set another record, for the “longest drive achieved by a lady driver” for a return journey to Liverpool from Britain’s capital.

Her accomplishments made her a media sensation. In her 1909 book, The Woman and the Car: a Chatty Little Handbook for All Women who Motor or Want to Motor she advised women to carry gloves, chocolate, and a revolver in the drawer under the driver’s seat.

Margaret Wilcox
For early adopters of the motorcar, driving was open-air enjoyment in its purest, and for some months of the year, frostiest, form.

On November 28, 1893, Wilcox patented a solution: the world’s first in-car heating system.  

It took decades for car makers to warm to her idea, which was considered a luxurious optional extra even when fully enclosed bodywork and glass windows became more widespread, but finally, in 1929, the Ford Model A became the first vehicle to offer in-car heating at the point of manufacture.

For Wilcox, the design also represented a turning point in her career as an inventor; it was the first to be patented in her own name rather than her husband’s, a practice which had been law in the United States until 1809.

Mary Anderson never profited from her invention … the windscreen wiper.

Mary Anderson
You can see clearly now because inventor Mary Anderson spotted a problem that needed solving, to clear ice from the windscreen a driver had to open the window, chilling the cabin in the process.

Anderson’s solution was a spring-loaded arm with a rubber blade that would move back and forth across the glass to wipe it away. The design patented in 1903 but her invention wasn’t an instant hit with car companies, who believed it would distract drivers. She never profited from her invention.

Bertha Benz, the original road tripper.

 Bertha Benz

Early one August morning in 1888 Bertha Benz set off in her husband’s car, without permission, spare fuel, or a map, to make the 106km journey from Mannheim to Pforzheim in Germany.

Her husband was Karl Benz, and the car was the world’s first. Karl was convinced his invention wasn't ready for the open road, but Bertha believed it was ready for the world, and that the world was ready to see a woman setting its new course.

 When she ran out of fuel, she purchased ligroin (a petroleum-based solvent) from a pharmacy in Wiesloch – now considered the first petrol station in history.

When the engine overheated, she used water from ditches and streams to cool it. When a fuel line became blocked, she cleaned it with her hat pin. She even used her garter as insulation material and paid a cobbler to cover the brake shoes in leather and in doing so invented the world’s first brake lining.  

Pat Moss, left, had the utmost respect of her brother, Sir Stirling Moss.

Pat Moss
"What she managed to do was amazing, actually," said Sir Stirling Moss, when asked about his younger sister.

High praise from a man who was not noted for his championing of women in motorsport.

Moss built her formidable reputation on outright wins and podium finishes at international rallies throughout the 1950s and ‘60s.  

Her maiden event took place in 1953, when she competed in her Morris Minor convertible at the age of 18.

She went on to be crowned five-times European Ladies Rally Championship winner and the Coupe des Dames on the Monte Carlo Rally eight times, she also won the gruelling 1960 Liege-Rome-Liege Rally in a fearsome Austin Healey 100/6 and went on to finish second at the Coupe des Alpes.

Her biggest achievement was winning the Tulip Rally in 1962 in the newly introduced Mini Cooper.

 Vera Hedges Butler
In 1900 Vera Hedges Butler was the first British woman to pass a driver’s test, but she had to go to Paris to do it. Assessed on her ability to pull away, steer and stop, she also had to demonstrate her knowledge of what to do in the event of a breakdown.

In Britain, compulsory testing wasn’t brought in until June 1, 1935.

Alice Ramsey

An expert driver with an unrivalled passion, she founded, and became the President, of the First Women’s Motoring Club in the United States.

Building her profile, her enthusiasm resulted in an offer from motoring company, Maxwell to drive from New York to San Francisco.

Always one to say yes to a challenge, Ramsey accepted and became the first woman to navigate the country at a time when roads weren't developed properly. Throughout her drive she had to maintain the car, so managed to fix broken brake pedals and clean spark plugs, amongst other things. 

Florence Lawrence

The ‘first movie star’, Lawrence not only had a love for acting, but also a fondness for motoring.

Growing increasingly frustrated with the number of accidents that were caused by not knowing if the car in front was just slowing down, or turning left or right, she created two iconic elements; auto-signalling arms which were essentially flags which were operated from inside the vehicle, and a stop sign that flipped up at the back of the car when the brake pedal was depressed.

Both creations led to the development of electric indicators and brake lights that are a legal requirement nowadays. 

WILMA Russey, New York’s first taxi driver, knew how to attraction attention.

Wilma K Russey

The first woman to be licensed as a New York taxi driver, Russey became quite the local celebrity when she took on the position. Never one to disappoint or shy away from the limelight, she is said to have received a tip from her first customer due to her leopard skin hat.

Charlotte Bridgewater

Charlotte Bridgewater built on Mary Anderson’s invention and created the electronic wiper. Although they didn’t work well at the time, they are obviously now common on vehicles.

Hedy Lamarr … Hollywood actress, also a founder of GPS.

Hedy Lamarr

An actress first, Lamarr worked alongside George Antheil during the Second World War to develop a non-jamable radio guidance system that allowed ships to guide their torpedoes effectively.

Despite not being widely recognised at the time, this technology is the founding of Wi-Fi, GPS and Bluetooth.

Dr Gladys West

This mathematician came to prominence after she was part of an award-winning study that proved the regularity of Pluto's motion relative to Neptune. But it was what she did next that landed her in the automotive history books. 

Dr West began working with satellites and programmed an IBM computer to deliver precise calculations to model the shape of the Earth. Using complex algorithms which accounted for variations in gravitational, tidal, and other forces that distort Earth's shape, her data became the basis for the GPS we still use today.

Michelle Christensen

It wasn’t until 2005 that the industry hired a female exterior designer.

Hired by Honda nearly 20 years ago, she was surrounded by cars from a young age and developed an interest, which resulted in her designing a number of prominent cars, including the second-generation Honda NSX.

Danica Patrick is the most successful woman in US motorsport.

Danica Sue Patrick

One of the few high-profile female racing drivers, Danica is the most successful woman in the history of American open-wheel racing to date.

She began driving professionally in the late 1990s and has taken part in hundreds of races in the NASCAR and IndyCar series.

Mary Barra runs General Motors.

Mary T Barra

The first female Chief Executive Officer of a major automotive company, Barra has been at the helm of General Motors for more than seven years and became the chairman of the board of directors in 2016.

Her appointment as the CEO brought her to the forefront of the industry and as such, she’s now one of the most recognisable names – not only in motoring, but in business, with Forbes and Fortune Magazine including her on their lists of powerful women.

Alexandra Hirschi

Also known as Supercar Blondie, Hirschi is an award-winning Australian presenter and social media personality. Best known for her automobile videos, she has over 45 million followers worldwide, and regularly works with luxury brands to promote their new releases.

 # More information: https://www.uswitch.com/car-insurance/guides/female-driving-confidence-iconic-women-in-motoring/

Record February belies continued shortages

Straight off the ship and into driveways – that’s the pattern showing in a big month of new vehicle registrations.

Toyota Hilux kicked dirt into Ford Ranger’s face in February

LAST MONTH’s record run of new vehicle sales isn’t a sign that New Zealand’s distributors are overcoming a severe shortage of stock to sell – it’s because every vehicle arriving here is being snapped up by waiting customers.

There are still big backlogs of customer orders, and as a result new vehicle stock reserves are still less than 50 percent of normal, says the Motor Industry Association.

“Essentially all new vehicle arrivals are going straight from the wharves to the distributors to the dealerships to the customers,” says MIA chief executive officer David Crawford.

“February’s new vehicle sales figure of 12,488 registrations was the strongest for the month of February ever, but it could have been even better - New Zealand is still facing a cocktail of supply constraints.”

These include some factories remaining on go-slow due to issues surrounding the Covid-19 pandemic, shortages of various vehicle parts, and big delays in getting new vehicles shipped to New Zealand.

Despite those issues, February was still a very healthy month for new vehicle sales. They were 9.2 percent up on February last year, and year-to-date the market is up 7.6 percent or 1865 units on the opening two months of 2020.

If the trend continues, March and April will be a welcome change from the same months of last year when sales fell to almost nil thanks to the effects of Covid-19 – the national Level 4 lockdown here, and the lack of vehicle manufacturing internationally.

A feature of the MIA figures for February were some significant changes in what vehicles are the most popular.

Mitsubishi Motors New Zealand’s runout programme for Outlander seems to be going well.

The Toyota Hilux cleaned out arch-rival Ford Ranger to lead the commercial sales race, its 804 sales taking a commanding 21 percent market share, well ahead of Ranger’s 15 percent.

And in the SUV/passenger vehicle segment it was the Mitsubishi Outlander that grabbed top spot from the Mazda CX-5 with 595 registrations – helped along by 133 sales to a fast-recovering rental car industry.

Compact SUVs strengthened their lead over from medium SUVs as the most popular vehicle type. Led by such product as Kia Seltos and Sportage, Mitsubishi ASX and Toyota C-HR, the segment grabbed a 22 percent market share with 2778 registrations. Year-to-date the compact SUVs now hold a 24 percent share, well ahead of the 19 percent held by the medium SUVs.

Toyota remains the market leader for all new vehicle sales with a 16 percent share, but Mitsubishi has improved to 13 percent thanks largely to continued popularity of its Outlander and ASX models, and Triton ute. Ford and Kia share third spot with 8 percent market shares.

“The February market has benefitted from recent stock arrivals and a resilient local economy where New Zealanders continue to spend on new vehicles what might otherwise be spent on international travel,” says Crawford.

The top 10 sellers for February: Toyota Hilux, 804 registrations; Mitsubishi Outlander, 595; Ford Ranger, 549; Mitsubishi Triton, 474; Kia Sportage, 370; Kia Seltos, 364; Mazda CX-5, 360; Mitsubishi ASX, 319; Suzuki Swift, 311; Toyota RAV4, 284.

Strong January, but chips are down for car makers

 A shortage of semiconductors is significantly impacting the world’s car makers.

Toyota Hilux enjoyed another strong month, though overshadowed - yet again - by Ford’s Ranger.

 NEW vehicle sellers made a strong start to the year – but some in the industry wonder if troubles lay ahead.

The Motor Industry Association, which represents distributors, is positive about last month’s tally of 13,893 new passenger vehicle registrations – citing it as being up 6.2 percent on the same month of 2019 and the third most successful January for car purchases. 

Individual brands are celebrating bonanza returns, most particularly Mitsubishi Motors New Zealand which cites the sale of 1403 of its vehicles – 1002 being passenger models and the remainder Express vans and Triton utilities – as being a 30-year peak.

 MIA chief executive David Crawford says the overall industry count suggests huge promise after more than six months of speculation about whether the local motoring industry has ‘turned a corner’ since its big losses during the Covid-19 pandemic’s numerous lockdowns.

He concedes, though, that January’s result was buoyed by “comfortable amounts” of supply arriving, much of which comprised backorders from previous months. 

One industry involver, who declined to be identified, believes January, this month and perhaps March might be the best months of the year.

From there on, he believes, most if not all distributors might start to feel the impact of a global issue for car makers around the world – the shortage of vital computer chips, particular semiconductors.

The factories making these items are now snowed under – and car assembly lines are slowing because products cannot be finished.

A global semiconductor shortage is hurting the world’s car makers.

The local commentator says car makers all around the world have been impacted.

That view is supported by overseas reports that have termed the shortage a “crisis within a crisis.”

Audi is among victims. According to media reports from Europe, it is resigned to 10,000 fewer cars in the first quarter of the year and putting more than 10,000 workers on furlough because it cannot finish cars. 

Its parent company, Volkswagen, announced its own go-slow due to a lack of chips last week, alongside rivals such as Honda.

The issue pre-dates the global Covid crisis; 2020 started poorly for new car sales, particularly in Europe, so brands believed fewer components were required.

Once plants and the countries they locate in were hit, often hard, by Covid-19, many manufacturers cut their orders from the Chinese factories making computer chips. 

The market has since rebounded but now the components are no longer so readily available, as suppliers switched their attention to other sectors, most notably gaming and home electronics.

Ordering new chips has proven to be a challenge. 

As one overseas’ analyst explained: "Semiconductors have a broad range of applications but a very limited pool of companies capable of manufacturing the silicon. 

"Demand is high, and supply is tight" and any sudden needs "can prove very difficult to accommodate". 

"Modern cars are becoming computers on wheels, with an abundance of silicon required to control everything from the infotainment system to camera, radar and lidar," he said. 

The demand from carmakers "competes for manufacturing capacity with smartphones, servers and a host of other segments".

And a boom in the market for devices such as PCs and new game consoles was making it doubly difficult to book manufacturing time. 

Numerous brands have had to suspend production, some for days, some for weeks.

The shortages have seen Mercedes-Benz, Fiat, Ford, Honda, Nissan, Subaru and Toyota all reportedly suspend production for days or weeks at a time.

The MIA has yet to address this matter.

In comment pertaining to last month, it says most of the growth was in the passenger vehicle and SUV sector, which saw a 6.7 percent rise year on year. Commercial vehicles (a sector driven largely by utes) also increased, but by a lesser 5.1 percent. 

The Ford Ranger and Toyota Hilux were the country;s most popular vehicles, respectively with 948 and 750  registrations in January.

Toyota maintained its spot as market leader, with 17 percent market share. Mitsubishi, Ford, and Kia were all trailing, on 10 per cent market share a piece.

It was also a strong month for electrified vehicles, with 1073 hybrids, 93 PHEVs and 244 pure electric vehicles sold. The strongest-selling EV was the Hyundai Kona, with 56 sales, followed by the MG ZS EV, with 49.

The year ahead - an insider view

What will 2021 bring for the new vehicle industry – how hard will it be to secure, let alone sell, new products?

THE count is in and conjecture that 2020 would become a tough year for the new vehicle industry has proven correct – an almost 25 percent slump on the 2019 outcome is sobering news.

 So, anyway, that’s the past – what’s the prognosis for the year we’ve now just rolled into; what will 2021 deliver?

It’s always interesting to get the views of an industry figure on such matters. So thanks to Anthony Maclean, who has nearly 30 years automotive experience gained in the United Kingdom and New Zealand.

In his home territory of the United Kingdom, MacLean had an extensive career with Volkswagen and Skoda.

In New Zealand he has held senior roles with Nissan, Blue Wing Honda, Tourism Holdings Limited and Mercedes-Benz and, most recently, with SAIC Motor’s MG marque.

As MG’s country manager, MacLean brought the reborn British make back to the local market, bringing it up to speed as a Top 10 brand, with 13 dealers and more than three percent market share.

He’s just departed this role to launch his own automotive consultancy. This new company, BoostAuto, will focus on marketing and planning services for distributors and dealers.

You can find more about BoostAuto at https://www.boostauto.co.nz

Anyway, BoostAuto’s first undertaking is a blog, kindly shared with MotoringNZ, that offers his top 10 predictions of the changes that will affect the national new vehicle industry this year. So, here we go ….

1 - January sales result will surprise.

January’s sales month will be huge; there was significant port congestion in December, and vehicles arrived late as a result; some brands were severely supply constrained last year, and one major brand held sales back as the year closed. January’s sales will exceed the combined 9092 registrations (2570 passenger cars and 6522 SUV sales) recorded in January 2020.

2 - Selling through Agency Model.

Mercedes-Benz in New Zealand will transition to agency model sales, and more will follow. This gives the distributors more control over the quality of the purchase experience (brand experience becomes more important than sales process; dealers lose the ability to discount, the distributor owns the stock, and dealers are paid a fee for selling). Five years ago, only Honda in NZ used the brand experience, others scoffed. In 2018 Toyota moved to agency model in New Zealand. Tesla has only been agency. Other brands will seriously start to consider the agency model locally. Honda in Australia move to agency in 2021. The shift has started and will gain pace. Some brands may take an ‘Agency Lite’ approach trying to test the idea without a full leap.
3 - Luxury Vehicle Price War

Maybe the word choice of ‘war’ is a little over-zealous. However, one of the effects of the agency model is that it brings retail pricing down. Kia already uses fixed margin to pre-sell Stonic and some Sportage. When it introduced Drive Happy pricing because of their agency model, Toyota NZ reduced the price of some models by as much as $15,000 (for a Hilux SR5 Limited 4x4 auto). While we might not see this level of price reduction for Mercedes-Benz, you can be sure of some price reductions. BMW will look expensive when their product team in Pacific Rise do their PVA (Price Value Analysis). So their question to answer will be, do we want to be perhaps five percent more expensive, or do we come closer? If they decide the latter route, expect the same conversation over at Great North Road at Audi HQ, and maybe even Lexus (and therefore by default Volvo).

4 - Internet Sales

 Through the lock downs we saw many businesses pivot to sell online. In the United States, a country that has long resisted internet sales in automotive, necessity – as they say – was the mother of invention. Dealerships moved much closer to transacting online to facilitate sales they would not have been able to do otherwise. The process might not have been seamless and polished but it worked. Additionally, with the shift to agency online sales become more likely. Tesla, ever the innovator has paved the way, and now reserving models online has become more common for multiple brands. Consumers do it for products that five years ago we would have not considered could be bought online. Expect a major brand to offer a model or two that can be ordered and collected without going into a dealership (and without having to haggle over pricing). It will be seen as a breakthrough; it is more of an evolution.

5 - Scrappage Scheme or Emissions Testing Spring Cleans the Vehicle Park.

It’s not news that our fleet (at around 15 years old) is ancient compared to Australia, UK or US (8-10 years old); our remoteness and love affair with older used imports are to blame. Whether an emissions testing standard or a vehicle scrappage scheme is introduced, the government will make tentative steps to tidy up the oldest, least safe vehicles and worst polluters.

6 - The March of the PHEVS

Plug In Hybrids are coming – and coming in volume. 2020 was the year we talked about PHEVs, sometimes scratching our head about their purpose. As they become more common their benefits will become more understood. PHEV batteries are roughly 10x the size of a mild hybrid battery; they have real electric and zero emissions range yet without the range anxiety. Every major brand will have at least one PHEV in 2021. New PHEV models are likely to include Hyundai Tucson and Santa Fe, Ford Escape, Kia Sorento and Seltos, MG HS, Skoda Octavia and Kodiaq, Toyota RAV-4 Prime, new Highlander VW Tiguan. Oh and market leader Mitsubishi Outlander gets a full replacement at the end of the year.

7 - Rapid uplift in BEV and PHEV sales volumes

This will be the year of greener transport. The Government has already signalled it wants most of its fleet to be EV. The PHEVs are coming from virtually all the big brands. BEVS will follow later in the year and early in 2022. Virtually every month will see a new PHEV or BEV model entering the market. The shot in the arm will be some kind of feebate scheme, potentially supported by a scrappage scheme late in the year.

BYD is a big player in China. This is the HAN electric car.

8 - Hello Geely. Or BYD or Proton

We know the Chinese brands are coming – some of these brands are the biggest car companies you have never heard of. They have scale, a BEV, PHEV focus and a desire to expand into international markets. Which one will make it here first is tough to call, but expect at least one new brand you have never heard of to arrive this year.

9 - Goodbye Holden. Who is next?

February last year saw the shock announcement that GM would quit the local market. Manufacturing groups are signalling consolidation where they have multiple brands in one market. It is likely that a smaller brand will leave in 2021.

10 - The market bounces back – almost

 2021 will see a market volume rebound to around 145,000 vehicles. Here’s the logic. Retail demand is strong, business confidence has improved, but rental company volume is soft. The economy’s resilience has surprised us, but the closed borders has restricted incoming tourists and with-it rental car demand. Rental cars account for 16-17,000 vehicles a year. Borders will re-open for next summer’s peak period and with it, rental car demand will soar as companies re-stock their depleted fleets. What’s more businesses will see increased confidence for the year ahead and will plan their capital expenditure accordingly. But some caution will remain, and it’s possible that we may have another localised lock-down and community COVID-19 cluster.

New car market hammered in coronavirus condition

The new vehicle industry took a big hit in 2020, registrations falling almost by a quarter.

Toyota’s RAV4 was the top-selling passenger model for the year.

NEW passenger and light commercial registrations for 2020 were down 22.7 percent on the 2019 tally, a publication specialising in industry news is reporting.

That means overall registrations dropped a massive 35,121 units to 119,620 for the year, says Autotalk.co.nz, citing data it has sourced from New Zealand Transport Agency. 

Report author Richard Edwards says this translates into a sobering impact for distributors and their dealers.

“Assuming an average of $3000 in margin, finance and insurance commissions and accessory sales per vehicle, those figures represent in excess of $100 million in turnover lost to the dealer segment of the trade alone for the year.”

The report has posted ahead of official notification from the Motor Industry Association, which generally posts monthly and annual outcomes on behalf of new vehicle distributors.

Autotalk.co.nz’s  report https://autotalk.co.nz/news/new-market-down-23-for-2020 says passenger registrations were down 23.3 percent for the year to 80,860 units, while commercial registrations fell 22.7 percent to around 39,000 units.

Toyota topped the passenger car segment with 12,795 registrations, followed by Kia on 7985, Mitsubishi on 6479, Mazda on 6289 and Suzuki on 5935.

The most popular passenger car last year was the Toyota RAV4 with 5350 registrations, followed by two Kias, the Sportage (2916) and Seltos (2611).

The Toyota Corolla, a previous pace-setter in previous years, was next with 2570; presumably a victim of the rental car business having collapsed when New Zealand was hit by the global coronavirus crisis.

In commercials, Ford was the top brand on 9124 vehicles, followed by Toyota on 8004 units, Mitsubishi on 3842, Holden – which ceased existence on December 31 - on 2533 and Nissan on 2376.

The Ford Ranger was the top commercial model for the year, and top vehicle overall, with a count of 7986 vehicles. The Toyota Hilux placed second, with 5808 units, followed by the Mitsubishi Triton (3694), Holden Colorado (2495) and Nissan Navara (2376).

The annual tallies arrived once December registration data was delivered; that showed 5572 vehicles being registered, a 31.75 percent drop on the same month in 2019. The Toyota RAV4 was the month’s top passenger model, with 387 registrations, and the Ranger the top commercial, and top-selling single model, with 662 units registered.

2020 new vehicle market set to be down 20 percent?

The global drop in new vehicle production during 2020 has been sobering – and is bound to affect NZ’s registrations count for the year.

Covid-19’s impact on car production was unavoidable in 2020.

ABSOLUTE clarity about the state of the New Zealand new car market in 2020 might be weeks away from resolution, but first indications about how the industry fared globally are sobering reading.

Gut feeling from within the industry here is that there’ll be no surprise should the year-total new car and light vehicle registrations count come to around 117,000 units, so around 20 percent down on the 2019 tally and the lowest annual count since 2013.

That kind of decline would be slightly greater than those predicted for the world’s three largest car markets – the United States, China and Germany.

But all has yet to be clear. New Zealand industry participants are awaiting one more set of figures, the registrations count for December, before they can achieve a total picture of the year’s trends and activity. 

As is always the case, this data doesn’t come easily - simply because the Government department involved in the accrual process, Land Transport, closes down over Christmas and New Year.

It is likely that provisional counts might be availed on January 5, but unlikely that full counts will be availed before January 11 – a much slower turnout than for any other month of the year, when normal business conditions apply.

That won’t inhibit individual brands from calculating their own in-house data – they, of course, know exactly how many cars they have retailed at any given time – but does make the achievement of a big picture view much more challenging, as competing brands are quite naturally loath to share.

Even so, the global picture is starting to take shape and it might well provide a pointer as to how the NZ scenario will shape up. 

In which case: Don’t expect an easy ride. The impression that NZ has done okay, simply because we experienced an unexpected surge in new vehicle purchasing activity in the months immediately following the easing of national lockdown conditions from April, does not mean that the market is set to show a decent result.

The big problem, evidenced especially within the final quarter of the year, has been one that should be pretty obvious to anyone who has been visiting new car franchises these past few months. The decreasing count of vehicles on display – and the increasingly obvious amount of unfilled display space -speaks volumes about how constrained supply has become.

Fact is, the vehicles that were bought during that sales rush were all easy pickings, being by and large, examples held in the national stockpile.

What’s become more challenging is achieving replacements for those units – Covid’s interference with not only car-making but component provision and then supply networks has been dramatic. Plants might still be making vehicles, but the rate of production has slowed and, often, so too the processes.

Coronavirus has given the world’s car makers a really rough ride in 2020; according to one report just out from an analyst based in the United Kingdom, all signs are that global car sales were down by $612 billion in 2020 and the entire market appears to be down by 10 percent. 

Data presented by StockApps.com, based on collations by a specialist, Statista, confirm what has long been accepted fact – that the Covid-19 pandemic hit the industry hard, causing supply chain disruptions, factory closures, and huge sales and revenue drops. 

StockApps picks the downsizing trend is set to continue this year and next, pointing out that even before the pandemic, the world’s car makers were already coping with a downshift in global demand.

In 2019 global passenger car sales revenues amounted to $US2.29 trillion. Small SUVs sales, as the largest revenue stream, generated almost 30 percent of that value or $US647 billion.  

Large SUVs and large cars segments followed with $US362bn and $US275bn in revenue, respectively.

However, the COVID-19 pandemic caused a huge hit, with total car sales revenues falling by almost 20 percent year-over-year to $US1.85trn in 2020.

Statista says its data suggests revenues in the large cars segment are expected to drop by 25 percent year-on-year, to $233bn.

Large SUV sales are set to witness a 24 percent cut, with revenues falling to $US275bn in 2020. Small SUVs follow with a 20 percent drop and $525bn in revenue. 

Analysed by carmakers, Toyota represented the market leader with a 10.6 percent global market share in 2020. Volkswagen ranked second with a 7.4 percent market share. Nissan, Ford, and Hyundai follow, with 6.6, 6.2 and 5.6 percent shares respectively. 

Statistics show the downsizing trend is set to continue in 2021, with global passenger car sales revenues falling to $US1.65trn. In 2022, this figure is expected to decrease by another six percent to $US1.55trn.

Statista data also revealed that all of the leading car markets are expected to witness a two-digit revenue drop this year.

As the largest market globally, the car sales revenue in the United States is forecast to fall by almost 18 percent year-on-year to $US507bn. This figure is expected to plunge to $US385bn in the next two years, nearly 40 percent less than in 2019. 

China, the second-largest market globally, achieved $US452bn in revenue in 2020, an 18 percent fall year-over-year. By 2022, total car sales revenues in China are set to drop to $US405bn.

As the third-largest market, Japan witnessed an almost 19 percent year-on-year drop when comparing 2020 and 2019 data sets, with passenger car sales revenues falling to $US92bn in 2020. Germany follows with $US86.5bn in revenue, 17 percent less than in 2019. 

In all, the three leading markets have likely lost $US231.5bn in car sales revenues in 2020 due to the Covid-19 crisis.  

In sickness or in health – what’s the impact of Covid on car distributors?

Look around many new car dealerships and it seems clear some are running short of stock. So how hard hit are distributors?

TEN days ago Toyota New Zealand’s chief executive acknowledged the effects of Covid-19, closed borders and delayed shipping and logistics into NZ are “severely” impacting on all operational areas of his business. 

Which means? Specifically, said Neeraj Lala, availability of most new popular Toyota models is impacted. Many popular models are subject to waiting lists, with potential for delays to continue into the middle of next year.

This was not news to MotoringNZ. From mid-year, we’ve been reporting the emergent issues stemming from Covid-19, notably that the big unexpected run in new car sales had severely depleted the national stockpile.

Toyota’s bold admission raised a question: Would the market leader’s bold and frank attitude encourage others to lend insight into their own situations?

Turns out they needed some encouragement. Last Thursday this writer contacted a slew of brands distributors – not all, but mainly the higher-profile players - as well the national body representing the new vehicle performers, the Motor Industry Association, to gauge their mood. The specific questions were: “What is the situation for your brand(s); what policies are in place and what message can you send your customers?”

Some provided in-depth responses. Some said they would not comment. Several did not respond at all. 

First, those who were happy to offer insight: 

Audi New Zealand, general manager Dean Sheed: 

“The issue is threefold.

First, local demand post Covid is stronger than anyone anticipated and what is arriving was ordered and forecasted four months ago – hence we are running down local (dealer and importer stock).

“ Also, factories can’t ramp up instantly – it takes time and the shipping takes six to eight weeks. We forecast a more balanced situation in March, 2021. 

“Also, though this has less impact, shipping is not back to 100 percent capacity. The shipping companies are not sailing all ships yet, hence capacity constrained. 

“Our messaging to customers is simple. ‘Don’t expect the dealer network to have the perfect car for you in the feature level you desire in stock. You may need to compromise if you want it today and are not planned.’ 

“We have launched a “new car” all dealer stock search locator on our website to assist with consumers finding a car – not due to this situation but for a better customer experience – in addition to the usual “used car” locator. https://search.audi.co.nz/new

“Many premium customers still like to order their specific car to their specification. That’s business as usual for us.”

Ford New Zealand, managing director Simon Rutherford: 

“At Ford we have seen higher than anticipated levels of demand across our range – especially on Ranger, Everest, all-new Puma and Escape as evidenced by increased shares of those segments.  

“Our dealers are at historically low levels of stock and our supply chain is more under strain from COVID demand recovery and sales across multiple markets than COVID supply chain issues specifically although they are a factor when you have a 4-6 month lead time(dependent on source) from order to arrival in market. 

“We would love to have more stock on the ground right now to support our customers and minimise the order to delivery time for our customers – they are having to wait longer than we would like.

“Thankfully, we have good supply “on the water” and are getting the support we need to gain additional production capacity/allocation where needed from our various plants around the world ranging across the US, Germany, Spain, Romania, Turkey and Thailand.

“We have strong order-banks going into January and on vehicles lines such as Puma where supply is tight (only 13 unregistered in market today) we are only allocating future arrival vehicles to dealers on the basis of a signed customer order.
“We have seen further disruption at the port which is a further factor impacting delivery of vehicles already built. The COVID challenges are far from over as we anticipate further disruption with supply chain capacities being squeezed by markets competing for capacity, supplier capacity ramp up challenges and distribution capacity hampering the movement of parts globally to support production and service operations. Container shortages, air freight capacity and port disruption are not new but they become more pronounced when demand is in recovery. 

“We have been working closely with our dealers to support customers with loan cars if their vehicle is off road to ensure they are kept mobile over the holidays and have placed additional loan cars at dealers.

“We track and publish vehicle ETA’s to our dealers and provide our customers with their order details so they know they have an allocated unit on the way.  

“At Ford we’re here to help so we encourage our customers to keep in touch and we’ve got their back – we thank them for their patience and understanding.” 

Mitsubishi Motors NZ, chief operating officer Daniel Cook: 

“There are two major factors influencing our new vehicle stock levels, supply and demand.

“On the supply side, we are experiencing only minor supply shortages out of the Mitsubishi factories, due to the impact on global supply chains. 

“There is also a challenge getting vehicles onto boats, and offloaded in a timely fashion due to the severe congestion at ports globally as general consumer demand resumes. This is being accentuated by the Christmas retail period in NZ.  

“Overall, our stock levels are lower than normal, however we are still receiving good deliveries, and in December alone we will have over 1500 units land, which is much more than a month’s supply. 

 “Most customers are presently waiting a month for their choice of vehicle and seem understanding of the shipping issues facing all importers.”

In respect to demand?

“Right now, we are experiencing unprecedented customer demand for our vehicles. Over the past two months (October and November) our retail sales have increased significantly on 2019, and are now limited only by our ability to supply everything our customers want.

 “Our brand is doing exceptionally well this year, due to our great value offerings, relatively strong stock levels and introduction of new models like Eclipse Cross and Express van. We are strongly growing market-share, peaking at 11 percent last month.

“I expect stock will remain tight over the next six months as our growth continues.”

Subaru New Zealand, managing director  Wallis Dumper

“We have been running a just in time process for decades that has fostered strong customer service and expectations plus naturally held residual values.

“ Covid19 had potential to be devastating. It did have an immediate impact and ‘just in time’ potentially became ‘just too many’. Like everyone else, we predicted the market would slow or even stop due to Covid.

“We were wrong in that assumption. The impact was not as bad as envisaged after the initial lockdown was over.

 “But then the world impacts started to hit us via factory allocation shortages - so we have endured massive impact by other larger scale markets influence on the Japan factory supply.

“We have had months with not enough cars but now the good news is our new model launches in 2021 have been supported by a Subaru Corporation allocation promise. 

“Based on this allocation all we can do is plan accordingly and maximise any opportunity to secure any extra stock that might become available.

“We are optimistic that we will get what the factory have promised us thus our hope is to launch the new models, like our completely new Outback, successfully and be able to deliver what customers order.

“We will strive to hold our position as the No.11 distributor in the world for Subaru. Despite all the impacts Subaru in New Zealand with only five million Kiwis is still selling more Subarus than countries like the UK with 60 million.

“My guess is that there will be various model shortages from time to time in 2021 as a result of our scale which is simply not able to influence things like a downturn in massive scale markets impact on the factory production.

 “We even launched our hybrids e-Boxer models in the middle of the year despite lockdowns. We are fortunate that we go into 2021 with all models being of the  21MY model designation so that’s XV and Forester and Impreza and WRX, already arriving for 2021. 

“It is all looking okay and reality is that I think other brands might start copying our business model of having customers forward order their brand new vehicle in the specific model choice knowing its  … actually brand new fresh off the factory floor.

“Then we will start planning for 2022 as my guess is there will be more exciting All Wheel Drive Subaru models on the way and we will make sure we get a solid factory allocation for our loyal Kiwi customers and strive to keep all those Kiwis in our business and Subaru dealers nationwide employed too.”

Volkswagen NZ, general manager Greg Leet.

“The Volkswagen brand, like other vehicle manufactures, is experiencing supply constraints due to the impact of Covid-19 in Europe.

“Thankfully it is a very different situation here in NZ.

“We have been fortunate that the timing has coincided with the run out of the Golf and the launch of the all-new Golf 8 (expected to land in February). The same situation with Tiguan, as we run down the current model with the arrival of the new facelift in February.  

“Our German colleagues have managed the situation well and as a consequence we have picked up production of other models from other markets effected with further lockdown measures.  

“Supply matching demand is key to our brand, we have seen a re-set of the industry in 2020 with stocks in such short supply and I would predict manufacturers will focus heavily on this moving forward.  

“We are very thankful to our loyal Volkswagen customers who have been understanding of the stock limitations. 2021 is very looking very positive with new stock arriving and we are seeing a big appetite for these new models, with a large number of customers pre-registering their interest.

Motor Industry Association, chief executive David Crawford:

“Stock arriving now was ordered three to seven months ago.

 “Factors affecting supply are that markets are stronger now than when the vehicles were ordered, so demand has exceeded supply; that the source markets are still experiencing partial shut down at some factories (this disruption is reoccurring when outbreaks of Covid-19 occur in source markets) and that shipping capacity has been constrained, timeliness disrupted and so on. 

“I would expect to see this pattern continue until the vaccine takes hold and Covid-19 comes under control. It may take to the end of 2021 to settle down properly. 

“None of this is a surprise, apart from stronger NZ demand for cars. We predicted the current hiccups in supply back in April. 

“Stronger demand has come from the $4 billion Kiwis usually spend on overseas’ travel each year instead going on cars, bikes, boats, caravans, home renovations and so on.

Hyundai New Zealand offered a single sentence response: “Certain models have been affected at certain times due to the global ramification of COVID, thus reducing production supply, however we have had and continue to have a steady supply of stock coming in.”

BMW NZ, Mercedes Benz NZ and Kia Motors NZ declined opportunity to take part. Ateco NZ (Alfa Romeo, Fiat Chrysler, Jeep, RAM, Maserati), Mazda NZ and Volvo Cars NZ did not respond.

Feebate 'best' route to lower exhaust emissions

Forget about banning gas guzzlers – convince motorists to buy low-emission vehicles, says the new car industry’s voice.

The lower a passenger vehicle’s emissions, the bigger the incentive, the MIA believes.

NEW vehicle importers have begun urging the Government to introduce a feebate scheme to accelerate the uptake of low-emission vehicles.

In a move obviously designed to see off any chance of an outright ban on importing vehicles fuelled by petrol or diesel, as has just been suggested by the Green Party, the Motor Industry Association, which presents new vehicle distributors, is pushing for new policies aimed at incentivising motorists to buy passenger models with the cleanest exhaust emissions – or none at all.

Chief executive David Crawford says members are strong supporters of having effective policies to encourage the reduction of carbon emissions from transport.

The way to do that is not to introduce policies aimed singularly at limiting vehicle supply. This would happen if the Government adopted the United Kingdom’s decision to ban pure petrol and diesel vehicles from as early as 2030. More preferable is to have policies that influence demand by incentivising the adoption of low technology technologies, Crawford says.

Such policies would be effective tools so long as they were implemented in a way that addressed the price premiums the low-emission vehicles have, he adds.

And the best way to achieve that is to introduce a feebate scheme that encourages car buyers to choose vehicles that are more efficient and less polluting, through rewarding those who do by giving them a rebate on the purchase price, funded by fees added to the price of less efficient vehicles.

“Because the distribution of new vehicles in New Zealand is a derived demand model, a well-designed feebate scheme incentivises change as it influences the purchase decision,” he says.

“This in turn alters the mix of models supplied by distributors which is more influenced by what is bought, and therefore restocked, rather than policies aimed singularly at limiting supply.

“Low emission technology is expensive, so policies that address low emission vehicle affordability are likely to be the most effective tools available to the Government.”

The previous Government proposed a ‘clean car initiative’, a ‘clean car standard’ (which would be a vehicle fuel-efficiency standard) and a ‘clean car discount’ (which would apply a rebate or penalty depending on exhaust emissions).

At the time, the MIA said it welcomed sensible discussions on ways to make vehicles cleaner and greener, and it promised the new car sector would work constructively with Government to help  create the best mix of policies to achieve that outcome.

The organisation didn’t like the ‘clean car standard’, because it implied that distributors had a significant influence on what vehicles Kiwi motorists chose to buy. It claimed that policies aimed at controlling supply into our market, imposed artificial controls that could distort the market.

But the MIA was particularly keen on the proposed ‘clean car discount’, as it would send a very clear signal to consumers and would over time increase demand for lower emitting vehicles. The MIA said that in its view it would be the most powerful policy available to the Government to influence car purchase decisions.

However, later in the year the whole ‘clean car initiative’ came to a screeching halt when the kybosh was put on the proposal by New Zealand First, a partner in the then coalition Government.

The MIA is asking for the ‘clean car discount’ to get picked up again by the new Labour Government, and as originally suggested it should apply to all light vehicles of less than 3500 kilograms gross vehicle mass.

Under the MIA’s proposed feebate scheme, vehicles with CO2 outputs of 230 grams per kilometre and above would pay a penalty, those with emissions of between 100-230 g/km would be in a “neutral” zone, those with emissions of between 50 and 100 g/km – which would be some hybrids and most PHEVs - would attract a low rebate, and those with CO2 outputs below 50 g/km would attract the highest level of rebate.

“If the Government were prepared to put say $10 million a year for several years into the feebate scheme, then the level of rebate for low emissions vehicles could be higher thereby significantly increasing the rate of uptake of low emission vehicles,” says Crawford.

He adds that the level at which a fee or rebate (and the size of the neutral zone) would need to be lowered with each successive year, so that over time these would become more challenging. If the Government agreed to contribute to the rebate fund this would also reduce over time.

MIA: Feebates to encourage efficient cars better than outright ban

We’re not well-placed to even consider following the UK’s ban on selling fossil-fuelled new cars from 2030, the new vehicle industry contends.

CONTENTION New Zealand should follow Britain’s lead and pursue a ban of sale of fossil-fuelled cars and vans from 2030 has alarmed new vehicle importers, whose representative body says that deadline is way too close.

David Crawford, chief of the Motor Industry Association, which represents factory-appointed distributors, says his organisation does not dispute that a ban on pure petrol and diesel vehicles might become necessary at some future point.

However, thought proposed by Greens co-leader and Climate Change Minister James Shaw that NZ needs adopt the same policy announced in the UK this week, and introduce a ban on the sale of new petrol and diesel cars in 10 years, has alarmed and, the MIA contends, is based on poor information.

“2035 is too soon let alone 2030. Readily available and affordable alternatives are not yet apparent with the priority given to the development of left-hand drive markets. 

“I believe that some of the premises underlying James Shaw’s comments about doing the same in NZ are ill-informed.”

Mr Crawford explains that the new vehicle market operates off a derived demand model, not a supply model.

“Change what customers buy and we will change over time what is supplied. Supplying items that sell is where companies aim to operate.”

The MIA remains a supporter of the feebate Clean Car Policy thwarted under the previous Labour government by its then coalition partner, NZ First.

The proposal to encourage car buyers to choose vehicles that are more efficient and less polluting, through rewarding those who choose more efficient models by giving them a rebate on the purchase price – this funded by fees added to the price of less efficient vehicles – remains unreconciled. 

Had it got through, from next year, the most efficient vehicles up to three years old would have conceivably cost up to $8000 less, while the least efficient would cost up to $3000 more. Older used imports (sold in New Zealand for the first time) were to attract a maximum rebate of $2600 or a $1500 fee. 

Mr Crawford offers that a feebate would be much more effective than a ban.

“Bans will create a lot of issues, resentment and perverse behaviour. People will hold onto their old vehicles for much longer.”  

The main issue facing the NZ market is affordability and access to a suitable range of makes and models that fit customer needs, he adds. 

Having crunched the numbers, the MIA was certain the rise in transport emissions was not coming from new vehicles. He said Mr Shaw’s reference to diesel utes, which are popular are do produce relatively high emissions,  with comment about NZ’s love affair with Ford Ranger – usually the country’s best-selling one-tonner and occasionally its best selling vehicle on monthly count – was “shallow.”

“The sales-weighted average emissions for the new vehicle fleet is reducing year on year … not fast enough but it is reducing.

“The rise in transport emissions in NZ has more to do with the increase in the rate of vehicle ownership.

“Over the last decade it has gone from being well less than 700 vehicles per every 1000 people to well over 800.”

This, he contended, is mostly due to “the flood of cheap old, used imported vehicles.  

“Address the rate of vehicle ownership and we begin to address overall transport emissions.”

In direct respect to the UK’s ban, he said there were risks for that country, particularly in its standing as primary market. There are few right-hand drive markets; Britain is presently well-considered by car makers but there was potential its importance could diminish with this.

General Motors’ pulling out of right-hand drive market for sedans and SUVs around the world this year was effectively the death of Holden, a popular brand here.

“The point in favour for the UK, versus Australasia, is their market size. Their market might be big enough for manufacturers to prioritise development for their market. It’s a big question mark, though. 

He believes manufacturers will struggle “big time” to meet the UK’s timeline.

However, one positive for NZ is if makers do put more effort into meeting that timeline, “then it might mean we get a wider range of right-hand models developed sooner than what would normally be the case.”

If that were to unfold, NZ would be better to adopt policies to “make us a fast follower. Feebates to address affordability is the best approach in our view.”

Kia scores big during troubled October

Kia took control of passenger car sales last month, its Sportage and Seltos respectively accomplishing first and second places for registration count.

KIA SELTOS ENJOYED A STRONG MONTH. The larger Sportage did even better.

KIA scored a notable triple win during October, its compact and medium sports utilities achieving as the biggest-selling vehicles, and the brand coming out on top in total passenger registrations.

October market statistics supplied by the Motor Industry Association today show the Kia Sportage was the most popular passenger vehicle in October, with 488 sales, followed by its smaller brother the Seltos, with 471.

That was sufficient to allow the Korean brand to achieve a total of 1276 passenger vehicle registrations for the month, knocking long-time leader Toyota, which achieved 1117 sales, into second place.

It all represents a big turnaround in a 2020 new passenger vehicle scene that up until now has been dominated by the Toyota RAV4.

In September, for example, the Toyota achieved 464 sales – whereas the Sportage and the Seltos each accrued about half that. In October, however, RAV4’s sales dropped to 291 units.

There was better news for Toyota in the commercial market, where the new Hilux moved into first place with 731 sales, knocking the previously dominant Ford Ranger into second. It achieved 686 sales.

the updated toyota Hilux appeared to score well in its first month of availability, bumping out Ford’s Ranger as the country’s favourite utility.

Both utes finished the month comfortably ahead of anything else – third place was taken by the Mitsubishi Triton with 282 registrations.

Toyota also remained the overall new vehicle market leader with a 17 percent share in October via 2070 registrations, followed by Ford with 11 percent and Kia with nine percent. And it remains dominant for the entire year to date thanks to a 17 percent share – well ahead of Ford on 10 percent.

October’s total new vehicles registrations continued their downward trend for 2020, coming in at 20.6 per cent below October last year. A total of 11,876 vehicles were registered, down 3089 units on the same month last year.

“Year to date the market is down 23.5 per cent, which is consistent recent months’ data confirming our expectations that 2020 will finish about 25 per cent down on 2019 volumes, said MIA chief executive David Crawford.

The top 10 most popular vehicles in October were: Toyota Hilux, 731 sales; Ford Ranger, 686; Kia Sportage, 488; Kia Seltos, 471; Toyota Corolla, 315; Mitsubishi ASX, 292; Toyota RAV4, 291; Mitsubishi Triton, 282; Mazda CX-5, 279; Suzuki Swift, 232.