American Motor Trade in N.Z.

Sun (Auckland), Volume II, Issue 348, 8 May 1928, Page 7

American Motor Trade in N.Z.

Commissioner Studies Competition ! FEWER COMPANIES PREDICTED Interesting- sidelights on the American view of the motor industry in New Zealand are to be found in a report made by the American Trade Commissioner in Wellington, Mr. J. B. Foster, to the United States Department of Commerce. It is stated that American cars will have to face increasing competition in New Zealand, and it seems to be an admission that they are not all that is claimed of them when, in a foreword to the report, the director of the Bureau of Foreign Commerce says, they will also have to face “the need for further adaptation to local conditions.” We are told the English car is not suitable for New Zealand (although it does the work), and now it is admitted that the American machine is not ideal. What can the car buyer believe ? Mr. Foster makes several references to the New Zealanders’ preference for British goods and shows some anxiety for the future of foreign cars here. Seventy per cent, of the retail sales of passenger cars, he says, are made on the time-payment or hire-purchase plan, which gives the financing company an absolute right of ownership until final payment. Losses under this system are remarkably small. In commercial vehicles 85 per cent, of sales are on the time-payment basis, but, “more difficulty, however, is experienced in effecting payment for trucks than for passenger cars. Time selling is more common in the North than in the South Island.” Discussing competition Mr. Foster says: “It is recognised by the industry that many companies are handling too many competitive lines. They have been overstocked with cars, which have had to be sold at cost or at a loss in order to effect a turnover; but it is believed that once they have disposed of the excess stock, they Will concentrate on profitable lines. The greater portion of tlie excess appears to have been fairly well disposed of now, however, and a more secure note is being sounded. “Competition in the New Zealand motor trade is particularly keen today, more so than at any time in the past. Few dealers or importers have made any money during the past six or eight months; in fact, owing to the exorbitant prices which have been granted on trade-in cars, heavy financial difficulties are being experienced. Quite a few dealers during the year have earned their operating costs through repair shops, which have been inaugurated by dealers who formerly spent every effort in the sale of new cars. A close study of the situation indicates that only 8 to 10 large importers will play an Important part in the New Zealand motor trade during the next few years. The prevailing tendency is toward consolidation and centralisation. Many of the larger companies are already opening their own branches in the larger towns throughout the Dominion and are financing dealers in the smaller centres.”