Rocky road for car sales

Retailers in the eating, drinking and merriment business had a good Christmas but it was hard in the car yards.

Sales in supermarkets and liquor stores combined were just under $100 million or 7.3 per cent higher in December than in December 2004, Statistics NZ said yesterday. Takings in cafes, restaurants, bars and clubs were up $46 million or 10.9 per cent.

But car sales were $64 million or 9.3 per cent lower than a year earlier.

Some economists saw the weaker car sales as evidence of the kind of economic cooling the Reserve Bank has said it needs to see before further interest rate rises can be ruled out.

HSBC chief economist John Edwards said if households were pulling back it would be evident in house sales and then in motor vehicles.

But Bank of New Zealand's Craig Ebert said if car spending was down, registrations would be down and they weren't.