Industry predicts increase of up to 25 per cent for used cars, while new models may climb by 10 per cent.
The price of used cars is tipped to increase by up to 25 per cent next year as a result of the government’s clean car standard (CCS), which will come into force from January 1.
David Vinsen, chief executive of the Imported Motor Vehicle Industry Association (VIA), has sounded the warning and says dealers will have no choice but to pass fees incurred for cars under the policy onto consumers.
Prices for new light vehicles are also predicted to be affected, with Subaru of New Zealand forecasting an increase of five to 10 per cent in January. It also expects sales volumes may tumble because of the regulations.
The Motor Industry Association (MIA) says price pressures will continue for years due to a lack of available electric vehicles (EVs) to bring into the market, reports RNZ.
Under the CCS, importers will receive credits or face payments depending on the emissions levels of light vehicles they bring into New Zealand with the limits getting progressively tougher over the years.
Vinsen, pictured, describes the government’s clean car policies as a “double whammy” for the used car industry, with the feebate system implemented from April 1 this year also affecting the market.
“Prices of some vehicles will go down, like EVs will go down, but across the board, predictions are that [there will be] up to 25 per cent increase in prices,” he adds.
He adds the government not releasing final details about the CCS until early November meant there had been uncertainty in the industry about how the policy would be enforced.
Vinsen says VIA also urges importers to set money aside as they’re “going to get hit with a large bill in June” after Michael Wood, Minister of Transport, announced invoicing for the CCS would be delayed until June 1.
Dire sales forecast
Wallis Dumper, managing director of Subaru NZ, says prices for most of its vehicles will rise five to 10 per cent in January and the company’s most optimistic planning is for sales to tumble 20 per cent.
He adds there would be less pain for the automotive industry if the government had taken three or four years longer to roll out its clean car policies.
“Our sales could halve purely because of supply,” he explains.
“Subaru in Japan has a 2027 plan to have its own assembly line for EVs, but I fronted up in Tokyo and said I need these cars for the next year and they went, ‘No, we can’t do that’.”
The Ministry of Transport says the CCS charging regulations were released “as expected” this month.
“Consumers are set to benefit from the standard by having a wider range of electric and hybrid vehicles to choose from, using the clean car discount to make it more affordable,” it adds.
Keyword: Standard tipped to drive up prices