The Good Oil
Won’t somebody think of the car makers? – The drop in new car sales

Sales chart As at the end of August, new car sales in New Zealand were down by nearly 30% on the same point in 2008. Of the current top 10 manufacturers only Hyundai were ahead of last year’s sales and that was only by 16 sales.

Still, that has to be considered a huge success when you consider market leader, Toyota, sold a staggering 2877 less vehicles than at that same stage last year; and it still holds the number one spot. Of course, as we know from the problems that have beset America’s new car makers, this is a global slump.

So that means it’s a buyer’s market then?

Well you might expect that with the new car market performing so poorly that cars would be cheaper to buy. And you may be right when it comes to new cars. However, the international and local sales slumps have an effect on our used car market that you may not have considered.

The knock on effect you get from fewer new cars being sold is a shortage of second hand cars coming into the marketplace. With a tighter supply comes the inevitable increase in prices. Add to this the fact that for many years New Zealand has seen much of its used car supply coming from Japan, who are also experiencing tough times that’s affecting their used car supply, plus new government import regulations, and you start to get an idea of where our used car prices are heading. And remember, we won’t feel the full impact of 2009’s poor sales for another three to four years, which is typically the age that many cars enter the used car market. The good news for new car buyers will be their cars will retain a stronger resale value.

By the way, can you guess what New Zealand’s biggest selling model so far in 2009? Here’s a clue: It starts with Toyota and ends with Corolla. Some things never seem to change.

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