NZ new vehicle sales slowing in line with weaker economy

Tuesday 4th August 2015

New Zealand vehicle sales are slowing, in line with weaker economic growth, as demand for commercial vehicles declines.

New vehicle registrations edged up 0.5 percent to 10,366 in July from the year earlier month, according to the Motor Industry Association. Commercial vehicle registrations slipped 4.6 percent to 3,094 from July last year, while passenger vehicles rose 2.8 percent to 7,272, the highest for a July month since 1986.

Sales of new commercial vehicles have weakened in line with a slowing economy as tradespeople and farmers close their wallets in anticipation of lower earnings. New Zealand business confidence has fallen to the most pessimistic in six years, led by the agricultural sector and construction companies as prices for dairy products, the nation’s biggest export, have sunk to their lowest level since July 2009 and building activity in earthquake devastated Christchurch appears to have peaked. Reserve Bank governor Graeme Wheeler, who has cut the benchmark interest rate at the last two meetings, anticipates further reductions this year to bolster the economy.

"Sales of new vehicles remains strong but in line with other economic indicators further growth above current levels is uncertain," said MIA chief executive David Crawford. "While registrations of new vehicles for the 2015 year are likely to be above the record 127,179 achieved in 2014, it is unlikely to break the 130,000 barrier for the first time which we previously anticipated might be possible."

In the first seven months of this year, total new passenger and commercial vehicle sales are 5 percent ahead of last year.

Japanese car maker Toyota was the top selling brand in July, with 18 percent market share, followed by Ford with 10 percent, and Holden on 9 percent.

BusinessDesk.co.nz

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