Only the brave are predicting the shape of the motor industry this time next year, says motoring editor Alastair Sloane
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Motoring industry analysts looking at sales in New Zealand over the next year or so are relying less on computer-generated projections and more on tea leaves, crystal balls and tracking the sun across the heavens.
Ask pretty much anyone in the industry what this time next year will be like and the response is usually an evasive, "How about those All Blacks?" and, "Key looks like he's on to it, eh?"
Gloomy sales predictions have brought out the amateur astronomers in the industry. They reckon all will return to normal when Mercury and Mars get together. Something like that. It's a zodiac thing. Happens every so often. Look at history.
But tell them that history never settled on the origin of zodiac and they become distraught and change colour. The Latins said the word meant a circle of animals. So did the Greeks. But the Greeks later said it might not mean animals after all. A Greek scholar allied zodiac to the Sanskrit word for "path".
At this point the motoring star-gazers perk up. Path means the way, the light at the end of tunnel, they chorus. The yellow brick road to the Emerald City. Those Sanskrit guys knew it all along.
But what if the Chinese had it right? Like the Latins, they liked the animals bit best. The year of the goat, horse, dog, rat and so forth.
Oops, next year is the year of the ox, a grumpy critter that can't communicate. How's the ox going to help sales in 2009? The star-gazers chew on their bottom lips. That the ox represents something large in number stops them drawing blood.
Surely things will pick up in 2010. It's the year of the tiger, a symbol of power. Oh, oh, the tiger faces extinction. The star-gazers tremble at the word and start to nibble at their top lips. The extinction word is being whispered around Detroit.
Hang on a sec - there's something about emperors being at the side of the tiger, that the tiger means new life. Could it be?
Yep, 2011 holds the key. It's the year of the rabbit, a symbol of hope and a good communicator. Oh dear, the rabbit also warns against sinking money into risky ventures. What about 2012? Ah, the year of the dragon. The symbol of success, the big guy, dignified and honourable, if a little arrogant and impatient. The signs are there. Will the dragon breathe new life into the industry?
Zodiac aside, Perry Kerr reckons it will, although he expects the turnaround to begin with the tiger in 2010. The CEO of the Motoring Industry Association says the industry heads in a new direction in 2012 with new vehicle sales of around 120,000 units, up around 18,000 on record 2007 numbers.
"That is not an unrealistic projection," says Kerr. "Part of that growth will be the expense of used Japanese imports. Another part of it will be cyclical.
"You are going to get more hybrids, more fuel-efficient vehicles. The thrust in 2012 will come from that end of the market. Production for electric vehicles will start in 2012 too."
Meantime, Kerr expects overall sales next year to slide by about 10 per cent, to around 85,000-90,000 units, as the industry reinvents itself.
Dealers will have to find new money lenders now that traditional bankrollers like GE Money are pulling out. Money will be harder to get.
"In the past," says one dealer, "a finance company would provide a dealer with, say, a $500,000 floorplan but wouldn't worry if it crept up to $750,000 [a floorplan is the floating cost of the stock on the showroom floor]. But finance companies will have stricter credit requirements. Floorpans will be tighter. The strong will survive, the weaker dealers, if they aren't planning to get out already, will disappear."
It's a fundamental shift, a sea change for the industry. But Kerr remains optimistic. "To have the market in a downturn is not an unusual set of circumstances in the motor industry," he says. "It's just that we haven't seen it go down in the last seven years.
"The downturn won't continue forever. The finance industry will sort itself out and things will come right in the end."
After 2012 comes 2013, the year of the snake. One of the Chinese zodiac symbols is of a snake twisting around a rabbit. It is said to indicate wealth. The snake is also a symbol of cattiness. The two have always gone together when there's money around.
