High fuel prices are pushing Kiwis into smaller cars and there are now waiting lists for sought-after models.
A Volkswagen floor salesperson told the Herald demand for the VW Polo had been so high recently that buyers face waiting until November to get their preferred colour as petrol price rises begin to bite.
This matches up with data from Motor Industry Association (MIA), which shows that VW Polo sales have doubled in three of the last four months.
Volkswagen sold 71 Polos in May, 96 in June and 83 in August — well above the 51 sold during February 2017, a record month for sales.
MIA chief executive David Crawford said that while there has been the odd month of Polo sales exceeding 60 vehicles, dating back to 2015, there has been a clear spike in demand for the vehicle under current market conditions.
VW chief executive Tom Ruddenklau confirmed that there was currently a waiting period of around three or four weeks for a VW Polo.
He said vehicle orders were made well in advance and that it's sometimes difficult to anticipate how the market might change over a 12-month period.
He puts the high level of demand down to the Polo's fuel efficiency, and the fact that it is relatively spacious for a hatchback.
The VW Polo is often listed alongside its category competitors the Honda Jazz, Suzuki Swift, and Toyota Yaris as one of the most fuel-efficient petrol engines on the road in New Zealand.
Sales in all these models have been strong, with the Suzuki Swift coming in as the second most popular vehicle, behind the Toyota Corolla, for September sales.
The popularity of smaller cars suggests many Kiwi consumers are on the hunt for vehicles that take the sting out of petrol prices but don't carry the hefty price tag of an electric vehicle.
Last week, petrol prices hit new record highs, well above $2.30 per litre.
Automobile Association (AA) spokesman Mark Stockdale picked prices to rise even further because the Government had announced the petrol tax hike of 3.5 cents, "and with tax we know it will go up by 4 cents by the end of September".
"That will push prices for 91 octane just under $2.40 a litre," he told the Herald.
Despite gloom in the business community about the state of the economy, the continued growth in car sales indicates that consumer confidence remains strong enough for Kiwis to make big purchases.
Mark Lister, the head of private wealth research at Craigs Investment Partners, says consumers remain buoyant at a time when businesses have quite a bleak outlook.
Lister says businesses are currently concerned about rising costs and the threat of greater regulation, while consumers are enjoying the lowest levels of unemployment in ten years.
"You don't buy a new car if you're worried about losing your job or about what the future might hold," Lister said.
Lister said that current divide between businesses and consumers suggested that one side was potentially too optimistic and the other too pessimistic.
Lister said the verdict was still out on who was right.
"My bet is that it's somewhere in the middle," he said.