Tradie orders drive new vehicle sales growth in the commercial segment but overall new vehicle sales are softening and expected to soften further in 2019

Tradie orders drive new vehicle sales growth in the commercial segment but overall new vehicle sales are softening and expected to soften further in 2019
The top-selling Ford Ranger

The sharp cooling in new car sales we reported for November has carried on into December.

In fact, December sales of new cars were lower than for the same month in 2017 and 2016.

And for the full 2018 year, 108,213 new passenger vehicles were sold and that was just slightly less than for calendar 2017. The drop-off since October has been marked however, indicating we are now well past the peak.

December brought 4,893 SUV sales and 2787 sedan sales, a 64% share for SUVs. Over all of 2018, the SUV market share was 63% and up from 2017's 58% share. The rapid gains SUVs have made also seem to be over with the peak in June 2018 when 68% of all passenger vehicle sales were SUVs.

One interesting trend in all this is that the luxury end of the market is waning faster than the budget end - typical behaviour of a market that is running out of stem (and typical of the behaviour of luxury vehicles being purchased by financing - hire purchase or leasing).

And the industry is not expecting 2019 to be any better than 2018. "Given current global economic factors, distributor expectations for 2019 indicate a softening of the market. Further steady growth in the new vehicle sector above 2018 outturn is not expected," said an industry spokesperson.

While the passenger market is cooling, the same is not true for the commercial market, one dominated by tradie pickups and doublecabs. 3,470 commercial vehicles were sold in December, a new record high for that month. That brought the 2018 total to 53,557 for the year, itself a record high and +74% higher than for the same year five years ago. The Ford Ranger is the model that dominates this market and is the iconic representative of the type of vehicles in this class.

Having noted that, sales of new heavy transport vehicles reached 6,327 in 2017, almost a +8% gain on 2017. And that was enough to make it one of the fastest growing segments across all vehicle types.

Not included anywhere in this data are significant sales of hybrid, plug-in hybrid or fully electric vehicles. They are being sold but are still at less than 1% share. All manufacturers will be offering them soon, but the price differentials make their fast uptake unlikely - unless some sort of tax or cost incentive is adopted, which the Government is looking at as an encourager. Battery limitations and fast-charge stations also inhibit sales. The irony is of course, if they are successful, they will then need to add new taxes on EVs to pay for the roading infrastructure. Electronic tolling/taxing solutions are reportedly being explored.

We don't have the December data for used imports yet, but that segment cooled fast in 2018 with preferences shifting to new vehicles (and supply inhibitions relating to stinkbug infestations).

In the past year, we added more than 310,000 new and used import vehicles to our roads. One piece of monthly data not available is the level of 'scrappage' going on. But annual data suggests this is high too. There are now more than 4.2 million licensed vehicles on New Zealand roads and that is growing at about +3% per year. And that suggests that scrappage may be running at higher levels than recent sales levels.

New vehicles sold

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Source: NZTA
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Source: NZTA
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Source: NZTA
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Source: NZTA
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Source: NZTA
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Source: NZTA
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Source: NZTA

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42 Comments

Car sales data is a great indicator for the deterioriation of the "wealth effect" and impacts on comsumer spending. Not too much to see here except for positivity when looking at the trend. What is happening with the luxury car segment is typical end-of-bubble stuff, but only time well tell.

December brought 4,893 SUV sales and 2787 sedan sales,

But how many hatchbacks and wagons?

hmmm, sorry. They are included in the 'sedan' number, which is the total, less SUVs. My bad.

"unless some sort of tax or cost incentive is adopted"

There is already a tax incentive. They are exempt from road user charges, which is a significant incentive. For small diesel vehicles road tax is over half the running cost.

Isnt Dec always a low point as people dont want the car registered till the new year, other wise its one year old in one month.

You probably wouldn't want it registered in November for the same reason, maybe even October

Or you might not give a toss. Its still going to be the 2018 model with XXXXXkms in a few years when you go to sell. It doesn't magically become a 2019 model when you wait till Jan to register it.

Yes it does, the year is the year of first registration.

Or would you sell a Santa fe you bought brand new in 2018 as a 2013 model because that's when the 3rd generation model was released?

So if I go buy a 1998 Corolla thats never been registered because its been used as a race car, and go register it today it magically becomes a 2019 Corolla? No, no it doesn't.

However, what IS common in the vehicle industry is having a vehicle that's registered a model year 2019 that was actually manufactured in 2018. Unless there's a clear changeover in production (e.g. a new generation) the customer is none the wiser and enjoys their 2019 model car. The number of months the gap can span could surprise people.

Haha what? Do you actually think the year of a car is based on the year of registration?

Make it real fun ordering replacement parts.....

Why do you thing the first thing any parts guy/girl asks you for is the chassis number or the rego plates (which they use to look up the chassis number/VIN). Gets real fun when you have a car that is not quite what it's supposed to be (eg '91 chassis with '94 running gear swapped into it .. you learn to drive the catalog and just find them the exact part number yourself.

A P10 Primera imported from Japan in 2007.

“Mate those replacement Stop/Tail Lenses you got in for me are a funny shape.”

Oh and if you’re buying anything more than standard regular maintenance items you steer well clear of rip off merchants like Ripco. Particularly if you’re fixing up Euros like I am.

" Particularly if you’re fixing up Euros like I am."

Oh, i didn't know you were a masochist, my apologies. :)

You are welcome to your own opinion, but your exceptional edge cases don't change the law.

"for motor vehicles registered after 1 January 2007, “vehicle year” means the year of first registration anywhere in the world)"

If you go on trademe and search for Toyota corolla 2015—2018, it is not going to show you any vehicles registered in December 2014

How does one register a 2018 “Model Year” Toyota Corolla in 2014?

But you’re correct, that is the law. I googled it.

so the number on the sticker says 2019.. but its still a 2018 model, with a 2018 production date, and the features of a 2018 model car. It doesn't get the upgraded stereo of the 2019 model, or any other difference that actually matters. Still worth exactly same as the one registered as a 2018 model with the same kms and condition.

Frankly, thats a stupid law, and i can see somebody having some fun with it. Buy a car to use as a tracktoy, thrash the tits off it for a couple of years at the track, then sell raffle tickets to win a 2021 model. Not false advertising according to that daft bit of law. Should have stuck with the year of production or the manufacturers model year.

Does the owners manual have a white blank space on the front cover and a marker pen so you can write the year down when you register the vehicle?

And what if you get yourself say an R31 Skyline with no VIN or plates? Like a project car. Finish it, Get a compliance cert and register it as a 2018 R31 Skyline. Rare as man.

2018... If you already have the Tardis to go back to last year to register it, why not just whip back to 86 and Pick one up off the showroom floor. And grab a couple of AE86s while you are there so we can be the recipients of some Takumi tax.. you could pay off your mortgage with that. :P

I’d be getting myself a few Japanese Taxi A31 Cefiros and selling them to The Man 2’s skinhead tenants in Christchurch.

Yes in my limited experience most owners manuals do have a page where the dealer writes in the date of first registration.

For instance the first item on the first page of this owners manual, is a box where you write in the date of first registration.

https://ws.skoda-auto.com/OwnersManualService/Data/en/Octavia_5E/11-2018...

Stupid law alright.
Oh, sorry you missed that car recall. Your vehicle year didn't line up with the recall spec.

In my limited experience recalls are generally based on VIN ranges. Year of Registration, even Year of Manufacture is no where near precise enough for recalls.

The publicity may mention the relevant years so you know if you should check if your vehicle is affected, but those date ranges are going to allow for the fact that model year does not align with calendar years.

the real irony was selling off half the power companies they owned, with no forward thinking.
its ironic they could give with one hand to increase demand and take the profits with the other

"The irony is of course, if they are successful, they will then need to add new taxes on EVs to pay for the roading infrastructure"

Solar & battery tech will mean more and more will go off grid.

They both need to get a lot cheaper to do that. Need a pretty big battery to be able to cope with a week of bad weather and not end up sitting in the dark. Or a big pile of firewood and lamp oil...

11
up

Agreed. But thats the Nats for you. Build (?) a national walkway/cycleway but without the infrastructure, swamp the country with immigrants and tourists but without the infrastructure, try and go sustainable transport... but without the infrastructure. Heck, they couldn't even think ahead to the next election to make sure they had a coalition partner or two!

Carmageddon in the UK: Auto Sales Plunge 12% in 2 Years, Diesels in Death Spiral. Consumers, Businesses, Fleets Cut Back
https://wolfstreet.com/2019/01/07/uk-auto-sales-plunge-second-year-in-a-...

Unfortunately diesels are not in any sort of death spiral here. The govt must love diesel powered vehicles coming in.

Working at a car shredder was one of my more fun jobs. Fairly dangerous though. Huge machines bashed the s#it out of them so that even engine blocks were reduced to fist sized chunks of steel.

Interesting.

Truly impressive. Which were tougher - fords or holdens?

Cars are as good a barometre of current economic times as anything I know. The two truck one's are also quite cool but it's still early days for them. Eating out is another measure I like, but again, how good are the stats? That's the trouble with getting old, it's hard to believe anything you hear.

nz and australian car sales are the same. it seems that house and cars sales in both nz and au are running in parallel - downwards.

ive always thought that asian immigration has kept giltraps in business over the last few years - they love the euro badges and are the only ones mad enough to wear the depreciation on new buys...

Interestingly the high numbers of new fleet sales in previous years are manifesting themselves on the auction floors. I just landed a latemodel CX5 in immaculate condition for an amazing bargain, who wouod buy new with deals like this around!

I agree, lots of ex lease stuff to go around. My last 3 cars have been new, but I will definately go the auction way next time.

NZs economic policy, I mean the Auckland housing market, must be weakening.

Comment of the decade?

Its simple
Going back to around last March, Mitisy, Ssangyong, ISuzu Ford GM Started to discount the current models , some brands have completely new models coming in for 2019.. of particular note Ssangyong re introducing the Musso ute and upgraded Rexcons etc
By Sept the discounts became significantly larger.. ie a 2.2 Sport Ssangyong , with full rear , nudge bars side steps etc could be picked up for a little over 40K...
Its not just tradies picking up these utes.. at those prices , in particular the Triton and Actyon where going out the door to mum and dads...
Come mid to end of Nov and the old stock has gone....

I wonder what percentage of people who will be near upgrading their vehicle are sitting on the fence a bit for decent electric or hybrid offerings? I wouldn't think significant but I'm sure there are some out there all the same.