Car sales better than expected for 2020 — and SUVs are reigning supreme
Sunday, 20 December 2020
Car sales have exceeded dealers’ expectations for this year but say a lack of supply due to Covid-19 factory shutdowns means they can’t keep up with demand.
Nelson KIA chief executive Alan Kirby said car sales were “really good at the moment; real good”.
“There’s no shortage of demand, there is a shortage of supply; we could sell more cars if we could get more cars”. He said that was the case “for almost every dealer”.
Kirby said people were upgrading to better cars, with SUVs proving the most popular.
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“Sales of SUVs are through the roof, we can’t get enough of that type of vehicle.”
New Zealand automotive industry site, Autofile, supports Kirby’s observation.
In November 2020 , eight out of the top 10 new passenger vehicle sales were SUVs, including the Toyota RAV4, Mitsubishi Outlander, KIA Sportage, Nissan X-Trail and KIA Seltos. The Suzuki Swift and Toyota Corolla came in at six and seven, respectively.
Kirby said the reason for the surge in car purchases was due to people’s holiday funds being redirected into other big ticket items.
“We’ve definitely had people say to us, it’s not like I can go to wherever, or this time last year I thought I was going to be in Italy. Now, instead I’m going to treat myself to a new car.”
Motor Industry Association chief executive David Crawford said the market was down by 22.5 per cent overall compared to last year, but the drop in sales wasn’t as significant as anticipated.
He said in the midst of lockdown, sales were predicted to be down by 35 per cent at year-end but the economy bounced back better than expected.
The true number of car sales was healthier than reports reflected as figures were recorded once new cars were registered, and many buyers were ordering cars and going on waiting lists.
“Vehicles are arriving now that were ordered three to seven months ago.”
New car volumes were affected by the impact of lockdowns on some of our main suppliers , Crawford said.
“That has affected the supply of parts to make cars and it’s affected the car factories in some locations so we’ve had disrupted availability.”
He said supply constraints would continue into 2021 but ease once the Covid vaccine was established and countries returned to normal.
The Car Company Nelson managing director Shane Drummond said he was buying from around the country and Japan to keep up the supply, but he was still 100 cars short of his regular 500 capacity.
He said his SUV sales had soared, and he put it down to people being higher up and having better visuals in the vehicles.
“You feel safe because they feel solid.”
New Zealand car buyers no longer had the selection of vehicles they had before Covid hit, which influenced many people’s choices, he said.
“People’s wish lists might have to change” because New Zealand had a limited supply of imports and new cars.
He said Japan had a big impact on New Zealand’s supply.
New regulations from March 2020 saw electronic stability control (ESC) in imports become mandatory.
Drummond said a large portion of imports didn’t have ESC including Toyota High Ace, old Suzuki Swifts and Nissan Tiida and “a lot of other small, popular, cheaper cars”.
New car sales had also been hit in Japan, leading to a stagnation in trade-ins and leaving very little used cars for New Zealand.
The shortage was affecting the price of used cars.
“I’ve sold cars for over 35 years and I’ve never seen used cars increase in price. If they’re in hot demand, prices are going up not down.”
That meant bargain-buys at car dealerships were rare, Drummond said.
“We had two people making offers on a ute . We declined both and sold it for full price. So pay up or miss out.”