Hard yards for car dealers

Photo / Greg Bowker

Car dealers are slashing thousands of dollars from the price of new cars as they battle through the recession.

Andrew Simms European in Auckland's Newmarket has cut $15,000 off a range of Mitsubishis, $9000 off a Citroen D4 diesel and $6000 off a new Fiat Punto.

Also this week, new and used car dealership Moyes Motor Group advertised a one-day sale on used Holden and Suzukis, going for as cheap as $5995.

Although new car sales rose 8 per cent between May and June, the industry has shrunk by more than a third since this time last year. The used car industry is struggling to get through a 23 per cent drop in sales since June last year.

Motor Industry Association chief executive Perry Kerr said car dealers were doing everything possible to attract buyers.

"I've seen about three or four big downturns in the economy over the past 20 years but this is the most severe. It's tough but the industry has always been cyclical and always gets through it."

Independent Motor Vehicle Association chief executive David Vinsen said things were starting to pick up and consumers should shop around for the best deals. "There's not a lot of stock around and they are very well-priced."

There have been reports of caryards closing around the country. Vinsen said dealerships which had not altered their business models were most likely to suffer.

"Instead of using large car yards on expensive real estate, dealers are now moving towards cheaper real estate outside main retail centres, or moving their showrooms to cheaper warehouses," he said.