NEW EXHAUST EMISSION STANDARDS
 

UPDATE 13/2/2009
 

The second stage of the emission rule came into effect on January 1st 2009.

From now, imported used diesel vehicles will have to meet the 2005 standard.

Petrol vehicles have to meet the 2000/02 standard

 

Since April 1st 2008 all vehicles entering the national fleet have to be emission tested. At this point this is only be for entry certification but you can safely bet that it will eventually become a WOF requirement.
   
 
   
 
   
 
   
  What exactly does this mean?
The Japanese Government signalled to the car industry that it would implement new emission laws in 1998. This law set in place the standards that new cars must meet. In order to avoid much upheaval the industry was given 2 years to comply with the new rules. What this means is that a model already in production at the start of 1998 could continue until 2000. After that it would have to meet the new standards. The same thing happened in 2000. New standards were published and the manufacturers were given 2 years to comply. This is what we mean when we refer to the 98/2000 standard or the 2000/02 standard.
 
Which cars can we import?
There is no easy way to answer this. Some models  are compliant from 2000. Others are 2001. There is even the odd 1999 model that is ok. The European models can be as late as 2003. When the frontal impact rule was introduced in 2003 the NZ government requested the manufacturers to supply lists of vehicles that complied with the new standard. In many cases the manufacturers were less than honest with these lists and took the opportunity to shut out many models from being imported. Chrysler was the worst, refusing to supply any details on used imports. Toyota just picked the date of 1st january1996 and stated that if it was built before then it did'nt comply. The lists were full of contradictions and were blatantly anti competitive. These lists were made available to the public and while they were a bit complicated they did show clearly which models could or could not be registered. This time the government was anxious that the self interests of the manufacturers would'nt be able to influence the new laws as they had done with frontal impact. For this reason they opted for the Japan and EU emission standards. The result has been that most people do not understand the new rules and are unable to tell just what models are ok to import and which are not. The LTNZ website has posted the rules as published but they are full of technical terms and emission codes which are mostly meaningless to those outside of the industry and very confusing even to some who are in it.
 
  So what does this mean to you exactly?
  the price of cars in this country follows a few basic rules.....
   
  1. SUPPLY & DEMAND.
 

The more cars available for sale the cheaper they will be. Prices will be low as dealers compete for the few buyers. If the supply is reduced, the number of available cars to buyers evens out. Prices will rise as a result. This legislation has certainly decreased the supply. For the last few years, NZ has imported around 120,000 used vehicles per year. The figures for this year are well down on this and projections are for the total to be less than 50,000.

 
2. CURRENCY & EXCHANGE RATES
The NZ dollar is one of the most volatile currencies in the world. In the space of 18 months we have seen its value against the Yen decrease by more than 50%. This means that imported vehicles will cost more as the purchase cost increases due to a falling exchange rate. International Shipping is paid in US dollars. We have lost almost as much ground against the US dollar. We have never experienced such a steep drop in the value of our dollar in so short a time.
 
3. COMPETITION FROM OTHER COUNTRIES
New Zealand used to be the  biggest importer of used Japanese cars. We have since fallen to about fourth place. Russia is now number 1. Competition for cars in Japan is now intense with buyers from Russia, Dubai, Cyprus, Sri Lanka, UK, Ireland, Australia, Africa, Middle East and Caribbean all trying to buy the same vehicles.
   
4. JAPANESE DOMESTIC ECONOMY

Japan is the source of the vast majority of imported cars. It follows that the state of the Japanese economy will have an effect on our market. In the early 90's Japan's economy was booming. This meant that the car makers sold record amounts of new cars. This was great news for NZ buyers as there were plenty of good used cars comming onto the export market at that time as Japanese people updated their cars regularly.  The bubble burst, however, around 1995 and Japan went into a recession that lasted for around 10 years. This was bad news for the car manufacturers and sales declined sharply. People don't buy new cars when the economy is bad and so the pool of cars available for export now is much smaller than it was 10 years ago. Due to the current global economic situation Japan is once again in recession and the big manufacturers have slashed production.
   
  In summary.....you will be paying more for your next car.
   
  Why does the government want to increase car prices?
  The government are saying that this legislation will improve our environment and save lives. NZ is also obliged to reduce greenhouse gas emissions under our commitment to the Kyoto protocol. A price rise is a by-product of this.
 
Saving the planet from global warming is a good thing is'nt it?
On the face of it, this legislation looks like a good idea. A decrease in emissions is a good thing whether you believe in the whole climate change theory or not. The problem is that these new laws won't lead to a decrease in emissions. The government's own research has produced the following results.....
 
Best case scenario: Every one buys the newer, cleaner cars              = Emissions will decrease by 0.5%
  Worst case scenario: people keep their old cars longer                    = Emissions will increase by 2.5%
  Most likely scenario: Some people will update but most won't         = Emissions will increase by 1.5%
   
  As you can see, this legislation will most likely lead to a net increase in emissions, exactly the opposite of what was intended.
   
  If it won't help why are they doing it?
  This research was conducted by the Labour government but Helen and co. chose to ignore it because it didn't fit with their agenda. It has more to do with politics than good science or common sense.
   
Woudn't emission testing for cars already in use here be more effective?
  Yes it would. This is done in places like California. However this could disadvantage people in lower socio economic brackets as their old cars fail emisson tests and they are hit with repair bills or lose the use of their cars. The result could lead to a catastrophic loss of votes, something no politician wants to occur. Its easier for government to impose import restrictions than to clean up the existing fleet. That way the only people complaining are a bunch of car dealers and who cares about them? They don't make up a big voting block so they can be safely ignored. Emission testing has been introduced as part of the entry certification process but this means nothing to the public as it is a one off test and it is the importer that has to fix any problems.
 
So, how much more will cars cost?
  Up until recently the most popular price bracket was $8,000 -$10,000. Most cars that were imported were for sale for a price in this range. This is affordable for kiwis and buys them a well equipped vehicle with low - moderate mileage. The average age of these vehicles was about 8-9 years old. Under the new laws cars will have to be not older than 6-8 years old. Experts predicted that entry level prices would be in the $12,000 - $15,000 range and this is starting to show as correct. This is beyond the reach of a lot of New Zealanders. In addition the increased competition to purchase such cars in Japan will lead to lower grade, lower quality and higher mileage cars being imported. You will be paying more for less!!
   
Hit Counter   How about diesels?
  This is even worse. If you want or need to update your  4WD, Van, Truck or Bus you will have very few options. Imported diesel vehicles will have to be not older than 4 years (2005 models).
As an example    (Trade me website  dealer search  13 feb 2009)
 

a 1995 Toyota Hilux Surf  3.0Diesel with 70,000kms currently retails for approx. $10,000 - $12,000. There is a wide choice of dealers, colours, options, and conditions and you won't have to travel far to buy one.

   
 

a 2007 Toyota Hilux surf  3.0Diesel  retails for $45,000. There is only one compliant import Hilux Surf for sale....its in Taupo 

  Late model diesel vehicles are not afforable for New Zealanders.
   
  This sounds like how it used to be 20 years ago!
  Older Kiwis reding this will remember the bad old days when old cars were recycled and continued to be used long past their use by date. Air conditioning was unheard of and power steering was a rare luxury. The New car dealers had no competition and could charge high prices for low grade base models. Imports changed all that and now the new car people have become super competitive with high spec cars for great prices. It will be very interesting to see if the new car companies continue to offer well priced cars after this law is enacted. Much as people like to malign car importers there is no argument that the vehicle fleet has improved dramatically over the past 20 years.
   
  But wait....there's more!!
   
  on January 1st 2009 Japan 2000/02 standards  were introduced (cars must be no older than 8 years old)
  on January 1st 2012 it will rollover again to Japan 2005 standards (cars must be no older than 7 years old)
   
  As you can see, time won't lessen the effectiveness of this law as it did with the frontal impact law in 2003.
   
  What will happen with the whole car import industry?
  I predict that by 2012 the car import business will be a fraction of it's size today. The days of the 100+ import cars retailers are numbered as are the days of the 1000+ cars wholesalers. Certainly many people will be affected and there have already been job losses among the thousands of people employed in the infrastructure of this industry. The number of importers is in decline and dealers will return to the old model of business where old cars are recycled and cars that were worthless are now suddenly becoming valueable again. Good money for old rope. Just like how it used to be.
   
  In summary....
  There are winners and losers in every game.
 

The winners are:

The Labour Government - they proved their green credentials by being seen to be doing     something on climate change. It won't cost any votes as in-service emissions might. Undoubtably more public servants will need to be employed to administer these rules
    The new car industry - less imports = less competition
  The losers are:     The environment - A net increase in emissions.
    The NZ car buying public - Increased car cost, less choice, lower quality
    The import industry - redundancies, bankruptcies
  Tradespeople - huge increased cost of commercial vehicles
  The economy - higher cost of living, inflation
 
A word on fuel economy
From April 7th 2008 all vehicles offered for sale are required to have a fuel economy label attached to them. This supposedly shows how much a years fuel cost will be. What it doesn't say is that there are many variables like fuel price, car condition, road conditions, how it is driven, how it is loaded etc...To give a "cost per year" is complete nonsense. (Fuel prices fluctuate daily) Also the Litres / KM figure (which is probably the most useful information) is not included on this label. This information is only available for cars 2000 or newer.
 
What should you do now?
This is the end of the golden age for the NZ used car buyer. The time of the $7000, low km, imported car is over. The ones that are currently for sale cannot be replaced. Once they have been sold thats it! If you are thinking of buying a car, do it now. You will never get better value for your dollar than right now.