Thursday, 8 September 2011

Car import redux

A few stats, courtesy of the Ministry of Transport. I'm here drawing on tab 5.2abcd: Light Vehicles Entering or Leaving the Fleet in 2010.

Recall that we're soon to ban imports of any cars from Japan produced prior to 2005 (noted previously here and here).

The chart below has the number of new and used vehicles entering the fleet. In 2010, 90,219 used vehicles entered the fleet; 74,651 left the fleet (either scrapped or exported). 77,554 new vehicles entered the fleet.

76,179 of the vehicles entering the fleet were produced prior to 2005. This constitutes about 45% of the total number of vehicles, new and used, entering the fleet in 2010. 

The average fleet age in 2010 was 12.88 years. So any vehicle made after 1998 was newer than the average vehicle in the fleet. In 2010, New Zealand imported 64,985 vehicles manufactured from 2001 to 2004. That's where the biggest hump in used vehicle imports is; it constitutes 39% of all fleet entry in 2010. All of those are newer than the average car in the existing fleet. Any of them produced in Japan and not meeting the 2005 Japan emission standards, which will be most of them, will be barred entry to New Zealand. 

Green MP Gareth Hughes lauds the changes, saying it will help save lives by reducing emissions. I'm really not sure that's the case. It would be surprising if the price of used cars did not increase consequent to the change - knocking out a substantial proportion of the general supply flow does that. While the imports are a small fraction of the overall fleet, they're a large proportion of vehicles entering the fleet; prices are set on that margin. If prices go up, folks will hold onto their cars for longer rather than replacing them. Some will certainly shift into buying a 2005 or newer import, but others will hang onto their older car for longer. The net effect on particulate emissions is then at best ambiguous.

I really wish the Greens weren't always so subject to the "and a pony" critique. We can't simply wish lower emissions by setting a regulation banning the import of older cars if that just leads owners of older, smelly cars to defer updating them because of cost pressures. But I suppose I'm wishing for ponies in wishing they weren't.


  1. Do you know here those numbers of saved lives are coming from? It would be interesting to revisit (1) how those estimates were obtained and (2) what would be the actual improvement taking into account the effect of the 2005 standards on particulate materials and gases.

    There is an assumption that a younger car fleet will automatically 'save lives'.

  2. Guessing its from a pollution study that came out a couple years ago, think it was NZIER that put together figures, and think deaths were mostly from logburners. But it's been a while since I've seen it.

  3. "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." - FA Hayek

    Never been more true.

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