Emissions elasticity and car import regulations

New Zealand now bans the import of cars that fail to meet the Japan 05 emission regulations, which effectively bans older car imports. In 2010, those imports constituted some 39% of fleet entry.

Radio New Zealand reports (HT: @zentree)

Used vehicle imports have plummeted following the introduction of stricter vehicle emissions standards.

The third phase of the exhaust emissions rule came into effect on 1 January. It prevents importers bringing in vehicles that do not meet what is known as the Japan 05 standard.

The Imported Motor Vehicle Industry Association says just over 3000 vehicles were imported in January, less than half that of the same month a year ago.

Chief executive David Vinsen says the sharp fall was expected as not only are importers adjusting to the new rule, but a lot of stock was brought in before January.

He says imports are likely to continue at 3000 - 4000 per month for the rest of the year.

It will be interesting to watch what happens to used car affordability and to average fleet age. If newer used imports become too expensive, folks will hold onto older cars with worse emissions for longer. The aggregate emissions profile can then get worse despite a cleaning up of the incoming cohort of vehicles. Chalk this up as a potential honours project for a couple years from now.