BUSINESS: Car sales growth stuck in reverse

BRUCE CUTLER
Christmas shopping may be a boom time for retailers but for many Hawke's Bay car dealers it is hard going for car sales as the festive season approaches.
October was the second consecutive month that motor vehicle sales have fallen, down 7 percent or $47 million, according to Statistics New Zealand.
Jim Gray, owner of Hawke's Bay Car Importers, in Napier, said sales for commercial vehicles were still good but car sales had stagnated.
"Cars, I don't want them. If I can get out of cars I will," Mr Gray said.
"Some guys might be saying they are selling 40 a month but they are selling them for less than they are worth."
"We sold a car this week that we've had there (at the dealership) for three years."
"I don't think we've seen the end of it yet."
Mr Gray said one underlying reason for dwindling car sales was the increase in dealerships.
"There's about 500 car dealers in Hawke's Bay, where there used to be 50."
Shane Anstins, owner of Drury Motors, Napier, said the year had started well for car sales but had now "flattened off" and sales might continue to stay low.
"We're not getting the same foot traffic in the car yard looking at cars," Mr Anstins said.
"I think it's just an overall trend and the next three or four months it will be tight, then maybe it will pick up."
Brendan Biggs, sales manager at Main Street European, in Hastings, said recently sales had "been a little bit hard".
"Around the election it has been quiet. September and October were very, very quiet months," Mr Biggs said.
"But last month was a good month. It was on a par for last year."
And long-time Hawke's Bay car dealer Alan Pike said the days of shearers coming into town to spend up big before Christmas have gone.
"When the price of petrol went up it affected the V8 sales a bit," Mr Pike said.
"And if the Government keeps shuffling those interest rates, it isn't going to help either."
Bank of New Zealand economist Craig Ebert said falls in car sales followed strong rises in July and August, suggesting discounting to clear a spike in car inventories which had built up in the June quarter.
Mr Ebert said another factor was that petrol prices had ramped up most steeply in August and peaked in September. But seasonally adjusted vehicle registrations for November had bounced back 4.1 percent.
He said if consumer sentiment was weakening, a drop-off in sales of big-ticket items like cars would be an early sign of more widespread weakness to come.
"We are starting to hear reports of spending going soft in some areas, like department and general merchandise stores, and some regions," Mr Ebert said.