UPDATE: New vehicle sales rise 10% in August, on track for record year

UPDATED: New Zealand new vehicle sales rose 10 percent in August and are on track to surpass last year's record as competition keeps a lid on prices even as a decline in the kiwi dollar pushes up costs for importers.

New vehicle registrations increased to 11,192 in August from 10,189 in the year earlier month, according to the Lower Hutt-based Motor Industry Association.

New vehicle sales so far this year are tracking 5 percent ahead of last year's record 127,179. That's a slower pace than the 12.4 percent growth in the past two years as a slump in dairy prices, the nation's largest commodity export, dents economic growth.

"The new vehicle market continues to defy general economic indicators," said MIA president John Manley. "Given the year-to-date sales position it is likely the industry will break the 130,000 unit barrier in 2015 for the first time ever."

New passenger vehicle registrations rose 9.4 percent to 7,752 compared with the year earlier month, marking the highest sales for an August month in 29 years. Commercial vehicle registrations advanced 11 percent to 3,440.

Manley said car dealers were reluctant to raise prices even as a decline in the kiwi dollar made imports more expensive.

"The new vehicle market is very competitive," he said. "Initially the distributors will probably try and keep the prices pretty much where they're at, they're always reluctant to raise retail prices because on paper anyway it puts them at a disadvantaged position to competitors, so they will try and deal with it through margins and incentives and things like that."

However he said a sustained drop in the currency made price increases "absolutely inevitable" and some buyers may be purchasing ahead of the hikes.

The New Zealand dollar recent traded at 63.67 US cents, compared with 83.26 cents a year earlier; at 76.82 yen from 87.42 yen a year ago; and 41.60 British pence, from 50.99 pence.

Last year's record sales, which broke the previous 1984 high, showed it had taken a long time for the industry to recover from the introduction of used car imports from Japan, he said.

During that time, New Zealand's population had increased to 4.6 million from 3.29 million.

Japanese car maker Toyota was the top selling brand in August, with 21 percent market share, followed by Ford with 11 percent, and Holden on 9 percent.

The Toyota Corolla was the top selling passenger model for the month, followed by the Toyota RAV4 and the Mazda 3.

The Ford Ranger was the top selling commercial vehicle model, followed by the Toyota Hilux and the Holden Colorado.

(BusinessDesk)