Sales boom across the Tasman

NEW Zealand’s car market continues to grow beyond predictions, with year-to-date sales to the end of June increasing 9.3 per cent to 54,475 units, putting it on track to exceed 100,000.

Much of that increase is down to “extraordinarily strong” commercial sales, says Motor Industry Association CEO David Crawford. June commercial registrations of 3181 vehicles was the highest figure for that month since 1982.

This result takes the YTD commercial tally to 14,754, up 26 per cent on the same period in 2012 when it hit 11,704.

“This reflects a strong housing market in Auckland and the Christchurch rebuild, providing business confidence to the trade sector,” said Mr Crawford.

The rebuild factor isn’t expected to subside any time soon: the centre of Christchurch is still behind a red zone cordon that’s been in place since February 2011’s lethal earthquake and which isn’t expected to lift until later this year.

Passenger car numbers experienced a more modest increase, the 39,781 total marking a 4.3 per cent rise over the same period in 2012. But this was still the strongest passenger figure since 2005.

“With a strong New Zealand dollar and economic confidence in our two largest cities we are on track to sell more than 100,000 new vehicles for the year,” said Mr Crawford.

The Toyota Hilux is New Zealand’s best-selling vehicle so far this year with 2449 sales, followed by its Corolla stablemate on 2424. This pair also tops the podium in Australia YTD, albeit in the reverse order.

Ford’s Ranger is third with 2197 sales, followed by the Suzuki Swift (1649) and Nissan Navara (1396). That's three utes in the top five. The top ten also includes three SUVs: Hyundai Santa Fe (sixth), Toyota RAV4 (seventh) and Holden Captiva (tenth).

Toyota dominated the market with 10,797 sales year to date, up 9.3 per cent for 19.8 per cent share. Toyota NZ had previously predicted more modest growth, but domestic CEO Alistair Davis has since revised that forecast.

“We underestimated the strength of the economy coming out of 2012, the GDP figures were way higher in March than everyone expected, and the economy has more momentum than everyone expected,” he said.

We now forecast a market well over 105,000, which would be the best year since 1984 when Muldoon devalued the currency – that was before used imports, and everyone bought ahead of the exchange rate driving up the price of cars.”

Mr Davis told GoAuto that “New Zealand is robustly past the recession, the economy is trundling along at 2 to 2.5 per cent growth, and diversification of our economy means most sectors, not just building and dairy, are growing.”

Ford holds second place year to date with 5873 sales, up 8.4 per cent for 10.8 per cent share.

Ford New Zealand managing director Neale Hill, speaking to GoAuto just days before he moves to take on the role of sales general manager for Australia, says “there’s a lot of underlying strength in the market”.

“Consumer confidence is on the up, if you look across NZ, macro economic factors are looking healthy. We’re seeing customers investing in business, to help fuel growth and demand.”

Australia has traditionally buffered NZ from market difficulties in Europe, but Mr Hill says the local political upheaval over the past week is unlikely to have a large impact.

“The developments of last week in Australia will put some interesting twists in, who knows what will happen now Rudd has taken over? We’ve been seeing volatility in Australia, but New Zealand is carrying on along its own path,” he said.

“I’m not sure what would happen if there was sustained economic difficulty in Australia, but I believe the basic fundamentals here [in New Zealand] are strong enough for growth to continue.”

On a side note, Mr Hill said he was looking forward to the challenge at Ford Australia, coming as it does just weeks after the Blue Oval announced its intention to axe local manufacturing by October 2016.

“I knew about the big announcements going in, and went in with full knowledge about it. I’m really excited about what lies ahead,” he said.

It’s a sizeable challenge, something the whole company is focussed on and there’s a lot of activity to see we tackle it with a well thought out plan.

We’re looking at adding 30 per cent more vehicles to the portfolio to cover potential gaps and cover other opportunities going forward.”

Holden sits third, up 23.5 per cent to 5353 sales and 9.8 per cent share, and remains well ahead of fourth-placed Hyundai, down 1.2 per cent to 4089 sales.

Hyundai NZ general manager Andy Sinclair chalked his company’s performance up to a lack of LCVs in a boom commercial market.

“The market’s driven upwards due to light commercials and we have none, other than a van, and we’ve been short of supply in that,” he said. “Any brand without a ute will struggle until light commercials drop back.” Mr Sinclair also said exchange rates have handicapped brands sourcing outside Japan – in Hyundai’s case, predominately South Korea.

“The Japanese brands have been extremely aggressive in price thanks to the exchange rate and we can only match it so far – we’ve no doubt lost some sales as we haven’t been prepared to get into a price war,” he said.

Nissan holds fifth, up 1.7 per cent to 3496 sales, just seven vehicles ahead of Mazda which climbed 7.4 per cent to 3489 sales.

Mitsubishi occupies seventh slot YTD, up 3.9 per cent to 2830 sales, ahead of Suzuki, down 4.9 per cent to 2689.

Suzuki NZ marketing general manager Tom Peck said the company also suffers by not playing in the light commercial market. On top of this, Mr Peck cites the still-strong used imports market.

“We’ve been hurt more than anyone by used imports with staggering amounts of Suzuki landing, especially Swift with 350-odd a month coming in used,” he said.

This compares to the 251 Swifts which sold new through official channels in June.

Volkswagen (up 26.4 per cent to 2523) and Honda (up 15.7 per cent to 1494) round out the top ten.

Honda NZ managing director Graeme Seymour said the company is sitting on almost a month’s worth of back orders.

Mr Seymour also says the biggest factor affecting sales since 2007/8, aside from natural disasters, has been the super-strong yen.

“And that’s coming back, which helps us,” he said. “The industry will keep on growing in the second half, there’s a lot of continents with excess capacity and we’ll benefit in terms of good supply and competitive pricing which will be very good for consumers.”New Zealand Top Ten June 2013:

Brand	Sales	Share %
Toyota	2350	21.9
Ford	1210	11.3
Holden	1097	10.2
Hyundai	912	8.5
Mazda	675	6.3
Nissan	641	6.0
Mitsubishi	561	5.2
Volkswagen	509	4.8
Suzuki	437	4.1
Kia	261	2.4