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Used import sales collapse no surprise

Used import sales collapse no surprise

The collapse in sales of imported used vehicles, as reported by the NZ Herald on 22 July, was completely predictable, according to the Motor Industry Association.

“Since the finance industry realised how exposed it was to inflated lending on overpriced vehicles, the used import market was always headed for collapse,” said Perry Kerr, CEO of the MIA.

“This scenario has been building up since the prices of new cars were brought into line by the removal of import duties way back in 1998,” he said. “As correctly priced NZ-new used cars fed right through the used car market, the used importers were always going to struggle to compete long term. They moved to older and older vehicles until they found out that there’s no room on a bottom-end car for the extra costs associated with importation. There are already too many cheaper cars on Trade Me.”

“The only way for importers to recover their costs on ten year old cars is to inflate the prices, with the assistance of reckless finance companies. That party is now over.”

“The move to older and older cars, coupled with the deregulation of the car sales industry, has encouraged the entry of undesirables into the industry as well,” said Mr. Kerr. “We’ve now reached the point where used car shoppers looking to buy with confidence need to do business at a dealership which is trusted by a new car manufacturer to handle their franchise.”

ends

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