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HomeNEWSNeed for speed as car industry continues to grow

Need for speed as car industry continues to grow

Kiwis are big on their food purchasing, year after year it is where the bulk of our money goes. But our second largest spending is hardly mentioned, our $8.1 billion motor vehicle industry.

According to the 2017 Retail Trade Survey, the Supermarket and grocery store industry brought in $5.3 billion in revenue for the quarter ended September 2017. Motor vehicles and parts came second in earnings with $3.3 billion for the quarter.  

Supermarkets see on average five percent growth each year, while motor vehicles are a little more sporadic, seeing seven percent growth since last year, but nine percent when compared to 2016 and 15 percent when compared to 2015.

Australian parent companies such as those who own Supercheap, Autobarn and Midas are seeing strong sales growth, and some are seeing margins of around 12 percent. Supercheap auto has 360 stores across Australia and New Zealand, and in its last financial year saw three percent growth and a revenue of $955.9 million.

New Zealanders, although slow into the housing market, are still spending large on cars. In 2017, 9420 Ford Rangers were purchased, valued at $50,000 each. As our purchasing power grows, so do certain markets, and unsurprisingly as vehicle purchasing grows so does fuel.

The Retail Trade Survey showed that in 2017 fuel spending was up 5.5 percent when compared to the year before.

Our motor industry is continuing to grow, even as first home buyers shrink. Yet a lot of what goes into car buying in our economy is second hand, this includes full cars and second-hand part importers.

Trade Me market place is a large draw place for second hand car owners, with the sites motors classified section continuing to increase. The sites 2014-2015 financial year saw revenue lift by 24 percent. In February, Trade Me presented its first-half net results, and reported a 16 percent lift of motor vehicle revenue compared to the year before.

Yet despite success of ride sharing apps such as Uber, car purchasing and retail is still expected to increase.

According to Transport New Zealand’s Trends and Projections 2014 Survey, the trend over the last 20 years has been for households to own a greater number of cars. Most likely as younger generations buy cars yet still reside or register them under a guardian’s address.

The survey shows the purchasing of vehicles has been steady since 1999 and the expectations are that those numbers will continue to grow slowly into 2020.

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