Motorbike sales soar on fuel prices

Motorbike sales are rocketing as New Zealanders turn their backs on cars to combat the soaring cost of fuel.

Motorbike registrations rose for the 27th consecutive month in June, when 758 machines were sold. That figure is up by a third on sales at the same time last year.

And it is a 45 per cent increase in motorbike sales since January, compared with the first half of last year, Land Transport New Zealand figures show.

June car registrations are down 19.2 per cent on the same time last year.

Climbing fuel prices have been blamed on the rising cost of oil internationally. In June 2004, petrol cost about $1.20 a litre. A year later it was about $1.30 a litre. Yesterday the price was $1.70 a litre.

Mike O'Sullivan, of Mt Eden Motorcycles, said people were finding alternative transport options.

He said sales were "unbelievably out of control" as more "non-motorcyclists" bought scooters and motorbikes to combat crippling fuel prices.

"It's been three really good years of business and it's looking even better for the future.

"If a motorcycle dealer is not doing well, even though it's winter, they are doing something wrong."

High-performance and high-output motorcycles were the most popular among people with money to spend.

But others were being more frugal, buying smaller machines such as 50cc motor scooters.

Mr O'Sullivan said the lure of filling a scooter for between $6 and $10 was great when car owners had to spend close to $100 for a tankful.

"There's a big percentage out there buying scooters now," he said. "It's the frugal people who can't afford to fill their cars any more."

The Land Transport New Zealand figures also show car-buyers are increasingly opting for small vehicles.

These made up 40 per cent of cars sold in the first half of this year, compared with 30 per cent last year.

In the first six months of this year, 37,115 new cars were sold, compared with the 37,263 sold in the first half of last year.

Goldman Sachs JBWere economist Shamubeel Eaqub said the drop in registrations was a sign of economic weakness and belt-tightening, as the value of the New Zealand dollar had fallen 15 per cent this year.

But the Motor Trade Association said the sharp fall in car sales was not unexpected after booming sales last year and early this year.

"The drop in the value of the New Zealand dollar earlier in the year meant that car-buyers had looked to snap up lower-priced stocks before import costs rose," said the association's communications manager, Andy Cuming.

"Likewise, buyers choosing to downsize to smaller cars in the face of higher fuel costs had brought forward their buying decisions for maximum advantage."

Last year, registrations were buoyed by the strong domestic economy and lower car prices caused by the strong currency.

But slow car sales suggested the economy was struggling to grow, and Mr Eaqub said he was comfortable with his forecast of 1 per cent economic growth this year.

"While recent business surveys have been buoyed by improvement in export sector sentiment, the weakness in motor vehicle registrations is an important reminder of spreading weakness in the domestic economy and the household sector more generally."