Falling car prices in face of rising inflation & petrol price hikes
"For the average family car, the annual petrol bill is probably up about $450", says James Weir in the DominionPost 26 April 2008. The current prices of petrol (at $1.90 a litre) could easily shoot through $2 a litre if the Kiwi dollar drops suddenly by US10c, which some economists predict.
Car buyers are increasingly preferring smaller cars. New car sales of small to light vehicles have increased from 35% of all sales in 2004, to 50%. In the same period, the big-car segment has fallen from 25% to just 14%. The following statistics show some of the impacts of the growth in inflation, interest rates and petrol prices.
- Sales of all vehicles (new and used) has fallen by $41 million (or 5.8%) in February 2008. This compares with falles of 2.5% in December and 0.6% in January.
- New car registrations up 3.6%
- Used import registrations down 8.2%
- Credit applications for cars down 20% this year
- Upper end of market generally unaffected
- some dealers say the downturn is the worst since the 1987 share market crash
- we'll see a decrease in the numbe of retail car outlets as less well capitalised dealers disappear.
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