Hard to get a handle on used car market: Turners

Photo / Hawkes Bay Today

Turners Auctions' chief executive Graham Roberts said it had been a tough used car market in Japan even before the earthquake shut manufacturers down.

Most of the cars New Zealanders bought came from Southern Japan, Roberts said.

"Clearly that's an issue [car manufacturers not working] short term," he said. "Is that a blip? It's too early to say what exactly that would mean.

"It sounds quite dramatic with these manufacturers that are closing down. It's just a matter of how long they're going to take to actually get back."

Japanese auctions in places where Turners Auctions and its partners bought cars had missed a week after the tsunami. "Last week they were back to previous levels," Roberts said.

"Obviously it's massive in the Sendai area but what does it mean to the overall supply we just don't really know right now."

Japanese domestic sales of new cars were down more than 40 per cent on last year, when the Government had been providing a subsidy, Roberts said.

"They stopped doing that and so people stopped buying."

The Japanese economy had been pretty tough and people were holding on to cars longer and perhaps buying second-hand when previously they might have bought a new car.

"When new car sales are down then there's less trade-ins and therefore less Japanese imports available to come to New Zealand."

Japanese used cars accounted for 5100 out of a total of 5400 imported to New Zealand in February, Roberts said.

The exchange rate had also not been favourable.
Supply was quite tight in New Zealand, which was forcing prices higher. "We are seeing pricing strengthening in terms of used cars but this time is usually a stronger period of the year [for demand] anyway."