From January, vehicles that do not comply with what is known as the Japan 05 standard will not be allowed into the country.A few helpful reminders for the Ministry:
A Ministry of Transport report from July outlines the possible effects that will have on vehicle prices.
They include consumers potentially needing to spend $2000 - $5000 more to buy a newer imported vehicle that meets the standard. Imported Motor Vehicle Industry Association chief executive David Vinsen says cheaper vehicles will not be able to come in and vehicles which do come in will be newer and therefore more expensive.
Greater demand for those newer vehicles will force up the price, he says, and as a consequence the price of vehicles already in the country will go up.
The Ministry says people will not be priced out of the market if they buy privately or at auction, or from a dealer who stocks up with imports prior to January. [emphasis added]
- The price of all used cars on the market is affected by the supply of used cars coming in from Japan. This is true so long as, at least for some people, imported used vehicles are a substitute for domestically sourced used vehicles.
- This is true both for vehicles bought privately and at auction.
- This may, but is not necessarily, already being priced into current used car prices. If dealers can import cars more quickly in advance of the ban than used car buyers can deplete current supply, competition among dealers will keep current prices down to the cost of importing used vehicles from Japan; it's unlikely that NZ demand substantially affects the overall market for used Japanese vehicles. But if there are capacity constraints in shipping, prices could be running up.
- After the ban, even a dealer who has stocked up is likely to increase prices - the replacement cost of each vehicle on the lot has gone up, and we expect dealers to sell at a price that covers the replacement cost of the vehicles on the lot. Just like we don't expect gas stations to wait 'till their underground tanks run empty before changing prices in response to wholesale price movements.
- I have no sense of whether Vinsen's estimate of the price effects are correct. He is undoubtedly correct about the direction of the change. I'm agnostic about magnitude.
- It is "beat you over the head with a stick" stupid to try to reduce net fleet emissions by restricting imports of cars that are, on average, cleaner and newer than the existing fleet. Please consider this post as beating you over the head with a stick.
- If you care about net fleet emissions, put in emissions testing at the Warrant of Fitness check.