New Exhaust Emissions
Working-class people will be hit the hardest when changes to the emissions standards for second-hand cars occur next year, a Blenheim car dealer says.
From January 1, Japanese imports will have to conform to the Japan 05 emissions test, which is tougher than the Japan 02 standard. This means most cars manufactured before 2005 will be non-compliant.
Richard Bateman, of Richard Bateman Motors, said it would be too costly for many to upgrade their older cars to newer, emissions-compliant vehicles in one go.
Most of his customers were buying cars from the early 2000s and in the $10,000 price range, but none would be compliant under the new standards. It was good to get the older cars off the road, but it needed to be more affordable for people. A more gradual upgrade to compliant cars would make it easier for drivers, he said.
Vehicles he was purchasing were already 10 to 15 per cent more expensive in the lead-up to the change, but he did not know how much prices would increase next year.
"Until we start buying things in the new market, then we'll know [how much prices will increase]. As cars start to run out we're going to see those prices increase."
Importers, who say the changes will hurt consumers, have published figures from a submission to Transport Minister Steven Joyce appealing for a delay.
Mr Joyce has refused and played down the impact of the changes.
The figures show a sharp price difference between the cost of some models that can be imported under the new rules, and those that do not comply. Based on retail prices, the oldest BMW 3 series which can be imported from next year costs $10,000, or 59 per cent, more than the 2004 model, which does not comply.
For the popular Subaru Legacy station wagon, the retail price of the oldest compliant models, manufactured in late 2003, is at least 17 per cent more than cars that will be excluded.
Imported Motor Vehicle Dealers Association chief executive David Vinsen said the figures showed a "step change" in the price of models that accounted for about 30 per cent of used imports. The rule changes would force up the price of cars already in New Zealand because no additional older stock would be brought in.
Used-import numbers could plunge by about 50 per cent next year, because consumers would not be willing to pay the new prices, Mr Vinsen said. Average used-car prices could increase by "thousands of dollars".
Proponents of the changes say although prices could rise next year, several factors could be behind it. New-car sales fell during the recession, dropping 26 per cent between 2008 and 2009 and causing a shortage of quality new cars.
Ad Feedback More recently, New Zealand importers have had more competition when buying used cars in Japan from Chinese and Russian traders. The Japanese tsunami in March has also hit production and destroyed thousands of existing vehicles, squeezing supply.
Mr Joyce said car sales were more aligned to the strength of the general economy than any rule changes, and arguments being used by importers were the same as the last time new standards were introduced in 2008.
"On balance, it's unlikely to be as significant [an increase] as the used-car guys say."
Transport Ministry sources said the figures from by Mr Vinsen were correct, but largely irrelevant. Fresh stocks of used imports accounted for only a fraction of the 3.2 million cars on the road in New Zealand, so a change should not hit prices materially because there was no shortage of supply. Consumers were increasingly using alternatives such as Trade Me to car dealers, and importers could buy old cars before the change.
AA spokesman Mark Stockdale said the changes could lead to higher prices, but they would mean safer, more efficient cars on the road. "There comes a time when we have to bite the bullet and upgrade our fleet."
BY THE NUMBERS
Number of cars in the New Zealand light-vehicle fleet - 3.2 million
Average age of New Zealand light-vehicle fleet - 12.7 years
Number of used cars imported in 2005152,488 Number of used cars imported in 2009 - 68,757
Drop in new-car sales between 2008 and 2009 - 26 per cent
Increase in price of average 3-litre car sold at Turners Auctions at the start of 2011, despite fuel hike - 6 per cent