Buyer behaviour set for ‘lasting change’
Colonial Motor Company’s chief executive has reassured shareholders the group is well positioned to weather current headwinds and capitalise on future opportunities despite the industry’s uncertain outlook.
Alex Gibbons delivered a report to the company’s annual meeting in Wellington outlining some of the main impacts on the business and the market over the past year.
He says the light-vehicle industry has faced significant disruption and change during that period, including the Middle East conflict causing global oil supply constraints and elevated prices.
Consumer demand “sharply accelerated for vehicles with a plug”, while consumer interest in mild hybrids steadily increased.
“Registrations remained ‘relatively’ steady for current top-selling models from leading brands,” explains Gibbons.
“These supply and demand dynamics are anticipated to bring lasting change to buyer behaviour.”
His presentation at the November 6 meeting notes that Japanese brands remain the primary source of new cars in New Zealand, although China is the fastest-growing provider.
Gibbons says new brands have challenged the value equation for new and used vehicles, with 69 marques available in New Zealand today compared with 55 in 2024.
Other statistics he shared were that Chinese models account for more than 50 per cent of EV and plug-in hybrid (PHEV) sales here, while 46 brands currently have a market share of less than one per cent, up from 37 in 2024.
Colonial’s strategy is to ensure its business reflects current and future market conditions, including preparing to weather an intense period of competition and potential for consolidation in the light-vehicle industry.
Gibbons adds the group will achieve this by supporting core partnerships, diversifying risk through new strategic relationships, recycling capital to unlock new opportunities, and continuing to invest in and support our people.
From an operational perspective, this means Colonial will “stand behind long-term core partnerships and work with dealers to support a wave of next-generation vehicles”.
A new team is also bringing together marketing, data analytics, customer retention and AI integration to provide “expert automotive support for all Colonial dealerships”.
“We cannot avoid challenging market forces but we are positioning the company to compete in the new-energy vehicle [NEV] space,” says Gibbons.
“This is just the beginning and we expect to have more to share as financial year 2027 unfolds.”
As for the financial year’s first quarter, he notes challenging economic and market conditions have significantly impacted earnings relative to the prior year.
“The Middle East conflict remains unresolved and with it the price of oil is elevated. Consequently, we would expect to see a continued trend of NEV adoption.
“We cannot avoid the realities of operating in an extremely competitive light vehicle market, but there should be confidence in the fact Colonial dealerships represent a range of top-performing brands across a diversified automotive portfolio.”
