Used-vehicle importers feel squeeze

The Imported Motor Vehicle Industry Association (VIA) says the number of used imports coming into New Zealand has plunged in the past two years as compliance costs climb and stock availability falls.

It claims “faulty legislation that favours the new car industry” is behind those trends and warns this is putting safe and reliable vehicles out of reach of lower-income earners.

Greig Epps, VIA’s chief executive, explains the clean car standard (CCS) regime is contributing to a decline in imports and rising retail prices.

“The supply of affordable used vehicles is being squeezed at both ends,” he says. 

“New regulations are pushing up the cost of compliance, while overseas markets, particularly Japan, are not producing the stock Kiwi families have come to rely on.”

VIA data shows used light vehicle imports have fallen 22 per cent year-on-year and are now 25 per cent down on 2023 volumes. 

Average used import vehicle prices are up by about 30 per cent over the same period.

Epps, pictured, acknowledges the role of global factors such as exchange rates and competition, but notes the CCS is within New Zealand’s direct control and is having a disproportionate impact on availability and affordability.

“Japanese domestic production has slowed and EV output is lower than expected. That’s outside our control,” he adds. 

“But the clean car standard is a local policy lever and it’s making it harder for dealers to supply vehicles that New Zealanders can afford.”

He notes vehicles such as the Toyota Noah and Vellfire, popular seven-seater people movers, are now effectively unsellable because of the penalties they attract under the CCS. 

“These were family vehicles accessible to lower and middle-income buyers. Now, they’re priced out of reach.”

VIA has identified three key factors it says are contributing to the pressure of supplying affordable vehicles. These are:

• Reduced EV availability from Japan 
Japan, the main source of used vehicles for New Zealand, has had low EV uptake domestically and produced 60,000 EVs last year, which was down 30 per cent from 2023. This restricts the pool of low-emission vehicles that meet CCS thresholds and attract low or no penalties.

• Cost increases from compliance penalties 
According to VIA, the CCS has booked $395 million in charges, with more than 70 per cent of used-vehicle import accounts now in deficit. The low volume of used EVs means a lack of credits to offset the penalties, which range from a few hundred dollars to $2000-plus per vehicle. These costs are being passed to consumers or absorbed by dealers, compressing margins and reducing stock variety. Epps says it is essentially a stealth tax.

• Fleet age and market fragmentation 
The mean age of New Zealand’s light vehicle fleet has increased from 14.38 to 15.57 years since 2022, the fastest rise on record. Lower volumes of younger cars lead to families holding on to older cars, pushing the fleet age up. Smaller dealers, unable to absorb the compliance burden, are exiting the market and leaving only larger, vertically integrated players in operation.

Call for fresh approach

Epps says the government’s regulatory impact statement on its policies underestimated the scale of supply challenges and consumer price sensitivity. 

“The original assumptions included ready access to low-emission vehicles and predicted minimal cost rises. Neither has come true,” he adds.

Rather than criticising the current government that inherited this policy, VIA is advocating for a more realistic, long-term plan that supports more hybrid uptake while working within the features of New Zealand’s market, one without local vehicle manufacturing or a neighbouring second-tier export economy for used stock.

“This isn’t about abandoning emissions goals,” says Epps. “It’s about recognising that you can’t regulate supply without working on understanding market demand. 

“Family-sized vehicles make up the greatest demand and our transition should find pathways to meet that demand while progressively improving the fleet profile.”

He continues that policymakers should consider adjusting the CCS. VIA wants officials to remove the “distorting weight adjustment calculation, ease back on physically impossible targets, and moderate penalties on hybrid models to maintain supply incentives without pricing vehicles out of reach”.

Other suggestions for the coalition include refocusing consumer education, especially in regional areas where price sensitivity and cash purchases dominate, and tailoring future policy to local realities, rather than replicating overseas frameworks such as those in Europe or Japan.

“We don’t manufacture cars and we don’t have a market to send old ones,” explains Epps. 

“We need policy designed for New Zealand because at the moment we can’t bring in the vehicles Kiwi families can afford.

“Regulatory ambition must match market reality as import volumes drop, vehicle prices rise, and the national fleet grows older.”