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Toyota's Outlook For New Zealand's Car Business is Positive




Toyota looks forward to growth in the new car business explains Toyota's Chief Executive Officer, Alistair Davis, in his address to motoring journalists at the launch of the new Hybrid Camry.

In the short term Toyota expects growth to be around five to seven per cent as the economy recovers, however the longer term view he said was more complex.

Over the three decades Mr Davis has been with Toyota he recounted the volatility of the new vehicle market with the market swinging from 70,000 to 120,000 units according to the health of the economy, the availability of used import vehicles and the sentiment of customers.

Mr Davis recapped to motoring journalists the unique nature of the New Zealand market, with high ownership and older vehicles compared with other developed markets.

Mr Davis said that with New Zealand having to keep up with changing international trends in emission and safety, it is likely that older vehicles will be forced off the roads, resulting in a rising level of vehicle scrappage. That in turn would drive up the number of new vehicles needing to be registered in New Zealand.

"At the same time increasing compliance requirements could limit the number of used imports entering New Zealand which would shift the supply mix towards new vehicles," a trend Mr Davis said had already occurred over the past two years.

In Mr Davis' opinion he felt these factors could drive the new vehicle market back over 100,000 units a year within three to four years.

However despite this positive outlook Mr Davis said there were economic factors that could slow down new vehicle sales, in particular the rising cost of high technology vehicles to reduce emissions and fuel consumption.

In terms of the future New Zealand vehicle market, Mr Davis made several predictions to the motoring press as to what he thought was likely to happen.

He said he believed international pressure would eventually encourage the Government to tackle the vehicle fleet issues in terms of scrappage programmes, in-field testing of emissions, and a progressive registration structure that encourages smaller vehicles.

"At the same time a supply side structure similar to that in Europe will encourage distributors to improve the environmental performance of their product. While vehicles make a smaller contribution to CO2 performance than agriculture, they are still a large contributor and one that can be addressed with little collateral damage in terms of employment and export performance," said Mr Davis.

Mr Davis also said he expected that an increased focus on renewing the fleet would result in a recovery of new vehicle volume to well over 100,000 vehicles by the middle of the decade, many of which would be smaller cars.

He also added that hybrids were likely to be common place as other car marques endeavoured to follow the Toyota and Honda lead.


Alternative power options were expected to be available including LPG, biofuel compatible vehicles, hydrogen vehicles, plug-in hybrids, pure plug-in electric vehicles, battery replacement vehicles and hydrogen fuel cell vehicles.

He said he didn't expect any of the more radical electric or hydrogen vehicles to become main stream for some time as it was a decade before Prius sold its first million and then three years for the second million.

"While many manufacturers have been promising all sorts of cool technologies, most of them remain motor show concepts and the ultimate test of a new technology (whether it be an iPod or a Prius) is whether it sells in the market place."

"As for Toyota, for reasons well explained in the past, we expect some form of hybrid to be the dominant technology for some decades," Mr Davis said.