Kiwi Families Priced Out As Vehicle Imports Plunge

Vehicle imports into New Zealand have dropped 25 percent as compliance costs climb and stock availability falls, putting safe and reliable vehicles out of reach of lower income earners, because of faulty legislation that favours the new car industry.

New Zealand’s Clean Car Standard (CCS) is contributing to a sharp decline in imported vehicle supply and rising retail prices, says Greig Epps, Chief Executive of the Imported Motor Vehicle Industry Association (VIA), which represents vehicle importers and dealers across the country.

“The supply of affordable used vehicles is being squeezed at both ends,” says Epps. “New regulations are pushing up the cost of compliance, while overseas markets, particularly Japan, are not producing the stock Kiwi families have come to rely on.”

VIA data shows used light vehicle imports have fallen 22 percent year-on-year and are now 25 percent down on 2023 volumes. Average used import vehicle prices are up by approximately 30 percent over the same period.

Epps acknowledges the role of international factors like exchange rate and competition but points out the Clean Car Standard (CSS) is within New Zealand’s direct control and is having a disproportionate impact on availability and affordability.

“Japanese domestic production has slowed, and EV output is lower than expected. That’s outside our control,” says Epps. “But the Clean Car Standard is a local policy lever, and it’s making it harder for dealers to supply vehicles that New Zealanders can afford.”

Epps notes that vehicles like the Toyota Noah and Vellfire (popular seven-seater people movers) are now effectively unsellable because of the penalties they attract under CCS. “These were family vehicles accessible to lower and middle-income buyers. Now, they’re priced out of reach,” he says.

Three key factors contributing to the pressure:

1. Reduced EV availability from Japan: 
Japan, our main source of used vehicles for New Zealand, has had low EV uptake domestically and produced just 60,000 EVs last year (down 30% from 2023). This restricts the pool of low-emission vehicles that meet CCS thresholds and attract low or no penalties.

2. Cost increases from compliance penalties: 
According to VIA, CCS has already booked $395 million in charges, with over 70 percent of used-vehicle import accounts now in deficit. The low volume of used EVs means a lack of credits to offset the penalties, which range from a few hundred to two thousand dollars or more per vehicle. These costs are being passed through to consumers or absorbed by dealers, compressing margins and reducing stock variety. 

Epps says it is essentially a stealth tax.

3. Fleet age and market fragmentation: 
The mean age of New Zealand’s light vehicle fleet has increased from 14.38 to 15.57 years since 2022, the fastest rise on record. Lower volumes of younger cars lead to families holding on to older cars, pushing the fleet age up. Smaller dealers, unable to absorb the compliance burden, are exiting the market, leaving only larger, vertically integrated players in operation.

VIA urges a reset in approach

Epps says the government’s regulatory impact statement underestimated both the scale of supply challenges and consumer price sensitivity. “The original assumptions included ready access to low-emission vehicles and predicted minimal cost rises. Neither has come true,” he says.

Rather than criticising the current government that inherited this policy, VIA is advocating for a more realistic, long-term plan that supports more hybrid uptake while working within the realities of New Zealand’s unique market, one without local vehicle manufacturing or a neighbouring second-tier export economy for used stock.

“This isn’t about abandoning emissions goals,” says Epps. “It’s about recognising that you can’t regulate supply without working on understanding market demand. Family sized vehicles make up the greatest demand and our transition should find pathways to meet that demand while progressively improving the fleet profile.”

Practical considerations for policymakers:

Adjust the CCS: Remove a distorting weight adjustment calculation, ease back on physically impossible targets, and moderate penalties on hybrid models to maintain supply incentives without pricing vehicles out of reach.

Refocus consumer education: Especially in regional areas where price sensitivity and cash purchases dominate.

Tailor future policy to local realities: Rather than replicating overseas frameworks.

Epps says New Zealand is not Europe or Japan.

“We don’t manufacture cars, and we don’t have a market to send old ones. We need policy designed for New Zealand because at the moment we can’t bring in the vehicles Kiwi families can afford.

“Regulatory ambition must match market reality as import volumes drop, vehicle prices rise, and the national fleet grows older,” says Epps.

For more information: www.via.org.nz

About

VIA (Imported Motor Vehicle Industry Association) represents businesses involved in importing, preparing, wholesaling, and retailing used vehicles into New Zealand, primarily from Japan, Singapore, and other markets. As the industry's collective voice, VIA engages with government and stakeholders to support fair regulation and sustainable practices across the sector.

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