Stock slowdown - or a chance to catch our breath?

Published Friday 21 September 2018


At VIA, the Imported Motor Vehicle Industry Association, our mission is to keep the doors open for imported vehicles. We represent the industry in addressing immediate tactical challenges, like stink bugs and airbag recalls, right through to understanding what the fleet will look like in the future (electric, autonomous?) and how New Zealand can best adapt to our advantage.

This gives us a unique view of factors affecting dealers. A potential trend we are noticing for 2018 is a slowdown of new stock coming into the country – but there are some factors that may take the edge off the negative effects. 

NZD and our buying power

The NZ Dollar has been dropping in value throughout 2018. Although this is good news for New Zealand exporters, it restricts the purchasing power of importers, and limits what we can buy.

Forces of nature – stink bugs and storms

While the recent Typhoon Jebi delivered a battering to ports facilities in Kobe, we expect delays from that to be relatively minor. The logistics companies and border inspection organisations (BIOs) moved quickly to assess the damage, and have assured us that it’s business as usual for the moment.

A far more significant challenge is the new stink bug season, and the stringent rules the Ministry for Primary Industries (MPI) has applied with its updated Import Health Standard.

From 1 September, all vehicles must be heat treated prior to shipping. This is to ensure that no pest species of stink bug that has found its way into a vehicle will get as far as being shipped to our shores. Obviously, we aim to prevent car carrier ships being turned away by MPI upon arrival, but more importantly, to prevent an introduction of a noxious insect that could devastate our primary industries.

While all the BIOs have advised that they are ready to begin heat treatment as part of the pre-shipping process, the extra step is likely to create a bottleneck effect, which may then flow through to shipping schedules.

Demand: minimising the downside

Following the initial stink bug crisis of February and March, many businesses are still feeling stretched, both physically and financially.

The large influx of vehicles into New Zealand in April and May meant that transporters, wholesalers and compliance shops went from famine to feast, and the abundance of stock already on the ground should help to balance out any delays in the near future.

On the consumer demand side, reported drops in business confidence and a more conservative position by some banks can play into consumer confidence. With the housing market cooling off, even if only by a few percentage points on paper, the “wealth factor” among homeowners can be diminished, making upgrade purchases less likely.

So, while a bottleneck of stock arriving doesn’t sound ideal, it’s fair to say that the timing may not be so bad. This could be a good chance to work through existing stock volumes, and ensure that our processes are in shape to take advantage of the next upswing.

To stay up to date with industry issues, subscribe to VIA Alerts or call VIA on 0800 VIA VIA (842 842).

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Prepared exclusively for Trade Me by David Vinsen