This is a guest post from John Polkinghorne
A commenter asked recently whether Auckland car sales were back to pre-recession levels. I love a question with an easy answer. As it happens, I just ordered some Retail Trade Survey data from Stats NZ, which shows sales in the Auckland Region for each retail store type. One of which is “Car Retailing”. So, here’s what has happened to car retailing sales in Aucks, since 2003.
Seems they peaked in 2004, fell a bit to 2007, then again in 2008 as the recession hit, and have recovered since then. If they keep growing, 2013 might be similar to 2007, although still below the 2004 peak.
According to the NZTA (http://www.nzta.govt.nz/
- 98,940 cars registered in the Auckland “postal district” in 2005
- 87,944 in 2007
- 74,311 in 2012
I’ve skipped out some intervening years – for some reason the NZTA thinks it’s a good idea to put this data in PDF format rather than Excel, and I can’t be bothered going through all the individual years – but I imagine the overall pattern is similar to the graph above.
So car sales aren’t where they were, but they’re on the way back up. This isn’t really surprising. Cars are a big-ticket item, and people tend to put those purchases off in tough economic times. The graph above would have been pretty similar for something like furniture or fridge/ freezer sales. It’s also interesting, though, that sales were already heading downwards from 2005. I’d put this down to the major increase in petrol prices around this time – which would make people think twice about whether they need a new car.
Of course, Auckland’s population has grown by a fair bit since 2004, so car sales per capita are certainly well down, and we might also have expected more of a “rebound” in car sales as people get around to making the purchases they’d been putting off. Which hasn’t happened.
We also know that, for the whole of New Zealand, the total number of licensed cars per capita has been falling, thanks to the MoT’s excellent Vehicle Fleet Statistics. I’m sure if someone asked nicely the MoT might be able to get these stats for Auckland too.
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Good stuff John. Are those dollar figures inflation adjusted? Would be very interested to see the per capita figures too.
Hey Nick, nope they’re not inflation adjusted.
Auckland’s population was 1.326 million as at June 2004 (old regional boundary, but that wouldn’t make much difference), vs. 1.508 million in June 2012, an increase of 13.7%.
So, both those factors mean that the drop in “cars sold per person” has been bigger than the graph suggests. The NZTA data can be used to do this if anyone’s interested, along with population estimates from Stats NZ.
Fascinating stuff. My first thought was that as new car sales declined, people may have switched to( especially imported) used cars – but no, total new registrations have fallen too.
The stats for total registered vehicles in Auckland and the same per capita would be very interesting too. How could an endless roads-fest be justified if there are no more cars to use the roads?
Interesting stuff, I recall reading this in the paper a few months back.
The graph we really need however is new car sales and total currently registered vehicles. The graph you have shown is heavily impacted by the strength of the kiwi dollar and the type of cars people are buying.
New car sales, new registrations (including second hand imports) and total registered vehicles (plus their age) would tell the full story. Are people buying less new cars but more second hand imports to save money, are they buying less cars overall, or are the simply hanging on to the cars they already have and putting off getting a new car for a longer time.
Spot on Nick, that’s the sort of information we need in order to make any calls on the big picture, otherwise we are just looking at the small picture and guessing from there.
Inflation adjustment would make a big difference to this graph: $800m in june 2004 is over $990m now, so sales are still about a third off their peak. What are the boundaries here though? Maybe a significant number of car yards have moved outside the boundary?
People are holding on to their cars longer. That’s a good thing as it reduces the need to manufacture new cars with all the associated environmental and other costs. And cars just last longer these days. I remember the dreadful locally assembled vehicles we all used to drive that were knackered by 100,000km. Now you can easily get twice that out of a modern car, and the last vehicle I owned was serviceable up until the gear box gave out at 320,000km.
I read this as a triumph of vehicle technology. I’m currently driving a 1999 Suzuki and it has plenty of life left in it.
I have a 19994 Nissan Lucino at 195k and it is going damn strong.
Another consideration is that new car sales in dollar terms aren’t as useful as new car sales in unit terms because there can be a range of factors that affect the dollar figure, starting with the possibility of the economic situation meaning the people buying new cars can afford pricier models that they’re buying in order to get better fuel economy.
My Dad ijust bought a BMW Beamer…..Although he is on the midst of a mid-life crsis at the moment. 😉
As obi suggests car sales figures really indicate nothing as far as vehicle usage is concerned. When times are tough people keep their cars longer and our average vehicle age gets older and older. Importing second hand cars was according to the importers supposed to improve the vehicle fleet when in fact the opposite has happened and anybody can buy an old banger and clutter up the roads. Recent moves to limit the age of imports was a move in the right direction.
There are a certain number of registered drivers in the country and the question should be how far and often do they drive. How often they change their vehicle has little relevance except to the car salesmen!
“How often they change their vehicle has little relevance except to the car salesmen!”
Thumbs up for that observation.
We’ve obviously been in a recession and I believe that explains a number of recent transport trends that others interpret as long term lifestyle changes. While over the long term I think new car sales will trend downwards because modern cars last a lot longer than old cars, the recent upward spike is interesting. I think this is one indicator that the recession is over. But we’ve also seen a recent significant reduction in public transport use in Auckland. Has public transport been seen as a distress purchase for people desperate to save money, and now that the economic outlook is better they’ll go back to driving their cars again? I think it is too early to tell, but if public transport use continues to decrease over the next year then I can’t think of any better explanation.
“We’ve obviously been in a recession and I believe that explains a number of recent transport trends that others interpret as long term lifestyle changes” – I agree to some extent, recessions always affect car sales. But looking at trends over 2005-8 say, before the recession hit, there was also a fairly significant drop in sales. Which is echoed by stats like VKT (vehicle kilometres travelled), etc which cover the whole fleet. My opinion is that the main cause is petrol prices, which rose sharply from 2005 and never really came down again (and probably never will).
And I think that people realising that high petrol prices are the “new normal” does have implications for vehicle travel, car sales etc, and this realisation becomes what we’d call “lifestyle changes” as people adapt to that.
Stu Donovan covered some of these other statistics – car ownership per capita, travel per capita – in his post at http://greaterakl.wpengine.com/?s=Vehicle+Fleet+Statistics&submit.x=0&submit.y=0
The downtown in number of cars per capita started in 2004/05, i.e. well before economic recession. This is a trend mirrored overseas, so if NZ’s not following that same trend then we’d be the exception rather than the rule.
Great stuff. I was looking at this some time ago and was told that where the vehicle was registered is not always an indicator of where said vehicle is located. For instance a car rental firm may register all of their vehicles in Auckland. No sure if this still holds true.
Yes car sales are more an indicator of the state of the economy than just changes in travel habits, but in places with better investment in alternatives to driving car sales and even more importantly petrol sales reflect not only the state of the economy but also mode shift, with very pleasing outcomes: http://www.bloomberg.com/news/2013-04-04/europe-to-shut-10-refineries-as-profits-tumble.html
I actually just found some more data on the MoT website, showing regional vehicle ownership per capita… http://www.transport.govt.nz/ourwork/TMIF/Pages/TV035.aspx which shows that the number of vehicles per capita in Auckland has been pretty much flat over 2000-2012, and currently sits at 0.64 vehicles per capita, a little below the national average at 0.73. Note that this is all vehicles, not just cars, although cars make up the bulk of it.
The MoT says, and this is a clever way of doing it, “The regional locations are established from the WoF/CoF inspection location rather than the owner address, to avoid the ‘vehicles registered to the Auckland Head Office’ effect”.
John there’s also this: http://www.transport.govt.nz/research/Documents/The-NZ-Vehicle-Fleet-2011-Sept-update.pdf
Which shows that ‘Light Fleet Travel per capita’ is down to last century’s numbers. Page 7. And average annual travel per vehicle is way down all century too. P7.