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Motorbikes now more popular NEW Zealanders responding to high petrol prices and a weak currency are turning to motorbikes and small cars, or not buying cars at all, according to the latest vehicle statistics from Land Transport New Zealand.Goldman Sachs JBWere economist Shamubeel Eaqub said registrations had "fallen precipitously" in the three months to June as a sign of economic weakness and belt tightening. But the Motor Trade Association (MTA) said the sharp fall in car sales was not unexpected after booming sales last year and earlier this year. Customers looking to take advantage of cost savings had boosted car sales in the earlier months of the year, MTA spokesman Andy Cuming said. "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 imported costs rose. "Likewise, buyers choosing to downsize to smaller cars in the face of higher fuel costs had brought forward their buying decisions for maximum advantage," Mr Cuming said. Last year, registrations were buoyed by the strong domestic economy and lower car prices due to the strong currency. Mr Eaqub said the 15 per cent slide in the New Zealand dollar this year had subdued demand. It was also indicative of consumer spending weakness. Slow car sales suggested the economy was struggling to grow and he was comfortable with his forecast of just 1 per cent economic growth in 2006. "While recent business surveys have been buoyed by improvement in export sector sentiment (related to New Zealand dollar depreciation), the weakness in motor vehicle registrations is an important reminder of spreading weakness in the domestic economy and the household sector more generally," Mr Eaqub said. |
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