You can thank Russia for affordable Kiwi cars

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If you can still afford to buy a used car, thank Vladimir Putin’s Russian Government.

Sadly, Putin can’t restore the used-diesel imports that were popular with our tourism operators, farm and city contractors and trades people – and with school bus lines.

The Kiwi dollar has fallen about 40 per cent against the yen. This follows last year’s tighter emission rules on imports and the credit crunch, which made finance tight for car dealers as well as consumers.

Japanese used-car imports would have stopped but for Moscow’s crippling new tariffs on rival Russian imports.

Only this enables New Zealanders to continue buying these Japanese cars newly imported, says David Vinsen, boss of the Independent Vehicle Dealers’ Association.

New Zealand pioneered Japanese used imports, but Russia until recently bought far more.

Importing, refurbishing and maintaining about half a million imported cars each year employed around 100,000 Russians, mainly around Vladivostok, only 800km from Japan.

Moscow imposed new tariffs to protect car manufacturers in western Russia. This, and rumours that Moscow might ban right-hand drive cars (like those from Japan) sparked riots in Vladivostok. Moscow flew out riot police.

The Russian imports have now virtually stopped, causing used-car prices in Japan to plummet, Vinsen tells BizScene. Many cars are being passed in at auction “because Japanese vendors, who are dealers, are failing to adjust to the new market realities.”

The price falls compensate for the Kiwi dollar’s dive. “Otherwise we wouldn’t be in the hunt,” Vinsen says.

Nevertheless, NZ car dealers face lower consumer demand as the recession bites. This has reduced Japanese used imports. From 125,000 two years ago they may fall to about 40,000 this year.

This hits the service chain that includes shipping companies, ports, trucking firms, inspectors and compliance shops.

“These people are suffering far more seriously than retail dealers,” Vinsen says. “The whole of this infrastructure is under extreme pressure from lack of volume.”

Used imports recycled for their second or more sale in NZ comprise a rising portion of car-yard
business.

Tighter emission standards introduced a year ago effectively ended used diesel vehicle imports.

Buses and light trucks that two years ago would have been replaced at 300,000km or 400,000km are being refurbished and put back on the road.

When the next phase of the rules kick in, some used diesels may be imported but they will be few and far between.

By then, Vinsen suspects, few diesel importers and refurbishers will be left. Industries based on them, such as building consumer campervans and buses, will be dead.

Family Cars

A suggestion to require booster seats for child passengers up to age 12 could spell hardship for
families.

A child over seven can now use an ordinary seat belt. The suggested tighter rule would require families with more than two children to use a dearer people-mover, large car or van.

Medium and small vehicles’ back seats typically provide two anchor points for boosters, plus a middle lap belt.

The Accident Compensation Corporation has endorsed the suggestion, which stems from a Starship Hospital study.

Poorer families that don’t break an age 12 limit may still be safe – walking.

Neill Birss will chase up your biz tips. Email him at neillb@maxnet.co.nz