KEY POINTS:
The oft-maligned used-car salesman is struggling as New Zealanders choose not to replace their second-hand vehicles.
Figures released yesterday by Statistics New Zealand show a near 15 per cent drop in motor vehicle retailing - the sale of new and used cars, motorcycles and trailers - from April to May this year.
There has been an 11.6 per cent fall in sales since September last year.
Car sales businesses the Herald spoke to were unanimous in blaming a slowing used-car market for the dropping sales.
Corporate buyers were still making fleet car purchases, helping keep the new-car market strong, retailers said.
However, there were changes to their buying patterns, with businesses opting for smaller cars or diesels, instead of traditional three-litre, six- cylinder, petrol-fuelled fleet cars.
Private buyers - wary of their household spending capacity, high interest rates and constantly rising fuel prices - were being far more cautious.
Giltrap City Toyota chief executive Graham McMullan said the wary consumers' behaviour was affecting retailers and driving down prices.
"Certainly people in the market are well aware of how the economy is tracking, and they're looking out for a deal. And they're getting it.
"There's a few things driving it. Obviously the fuel thing is putting a strain on household discretionary income."
The used-car market was directly related to household spending, he said. When times were tough, people tended to stick with the car they had.
While there was a continuing shift towards smaller used cars, New Zealanders were proving slow to switch to a truly fuel-efficient private car fleet, instead downsizing from big cars to medium cars, Mr McMullan said.
"I think Kiwis still haven't decided. A lot of them are looking at the small cars, but they're not quite ready to drive the real small fuel-efficient cars yet."
Hybrid vehicles were still priced too high above their pure petrol-burning counterparts to really tempt most buyers, Mr McMullan said.
If the sales drop continued, car yards would need to look at lowering their expenses. That would include redundancies.
"Some of us here in the central Auckland area, our operating costs are quite high. And the only way to attack that is personnel costs."
John Andrew Ford sales manager Paul Whittle said the trend towards fuel-efficient vehicles was outstripping supply, and sales were suffering accordingly.
"And people who would normally change their cars regularly are just sitting back and waiting to see what will happen with fuel prices."
The declining sales were making life hard for the car yards, but he did not see redundancies coming. "It is a bit hard, but we've just got to stock our yard right. It's something we've been through before, so we'll just adjust."
Turners Auctions spokesman Todd Hunter said the biggest impact his company had observed was on big-engined models.
"We believe it's being driven by a hysteria over fuel prices, and thinking they're going to save heaps more in fuel than they are."
Modern big-engined cars were now far more efficient than many people believed, Mr Hunter said.
Turners had also noted a sharp increase in attendance at its budget auctions for cars cheaper than $7000.
