New car sales on 26 year high

A major Western Bay car dealer says the region is enjoying the strongest new car market in almost 30 years.

The news comes amid an increase in retail spending across the country.

Statistics NZ figures show the total volume of retail sales rose 1.7 per cent with the largest movements in food and beverage services, up 4.5 per cent, motor vehicle and parts retailing, up 3 per cent and department stores up 5.4 per cent.

Statistics manager Blair Cardno said the total value of retail sales nationally rose 0.9 per cent ($169 million) with sales values rising in 12 of the 15 retail industries.

In the Bay of Plenty, motor vehicle and parts sales registered the largest increase in actual values compared to June 2012. It was followed by fuel sales and accommodation for the same period while electrical and electronic goods experienced the biggest fall.

Farmer Motor Group director Mike Farmer said it's the strongest new car market since 1987.

"It has been the strongest we have seen it for many, many years ... the reason being that a lot of people and companies that were trading through the global financial crisis had been holding off. But now there is a lot more confidence in the general economy and that is driving new car sales," Farmer said.

"New Zealand has hit another 100,000 new cars in the market for 2012 and is looking pretty solid this year. So if you compare that to the comparative new car market in 2009, which was just under 70,000 from memory, that is a 30 per cent increase. So over the last 40 years GDP and new car sales have followed pretty much line for line."

The dollar was strong so that represented good value for new cars, Farmer said.

Tauranga Motel Association treasurer Kris Stanatakos said overall its members were slightly better off or at least the same as last year.

"Bookings are looking good in comparison to last year and there is some confidence on the reps side who travel around they stay in accommodation. I know some apartments at the Mount have slowed down a little bit this time of year, that is normal for them as they do extremely well over the summer months."

Tauranga attracted a lot of corporate business and winter had been pretty good, Stanatakos said. "Long may it last into the summer because everyone prospers."

Tauranga Chamber of Commerce CEO Max Mason said many businesses were busy but some in smaller retail and hospitality were doing it tough.

"In winter retail confidence is more suppressed although this year it's been warmer than usual and that's coincided with school holidays. Tauranga is more fortunate than most other regional centres and there plenty of positive projects on the horizon that will impact on jobs and consumer confidence, and that usually translates into greater retail sales."