Greetings!
Well, Auckland finally moved to COVID Lockdown Level 2 this week. Hopefully it will stay there at worst, or fully move out of restrictions before Christmas at best….
I must say, we’re a bit jealous the rest of NZ can enjoy more “normality” at present (whatever ‘normal’ is these days!)
General customer feedback:
We have been speaking with many of our clients and gathering feedback both for us and our vehicle exporters customers and the common themes seem to be:
~ Buying of fresh stock in Japan is “hard” – many quoting a blend of “prices too high, exchange rates too low, not the stock numbers at auctions these days…” – Note: the Japanese domestic market is short of new cars and have resorted to buying more stock from used auctions at present.
~ New markets may be the answer – Australia, UK, Singapore – there’s even been a renewed interest in Thailand! (Be VERY careful as Thai domestic stock doesn’t comply with NZ requirements)
~ Some dealers have stuck to the old rule “How can I be a car dealer if I have no cars to sell?…” and have put their retail prices up so they can afford to pay more at Japan auctions for replacement stock
A few long time and well established dealers have stated that, despite their vehicle asking price increases, they are still selling well. One commented that consumer attitudes have changed somewhat and selling has been easier of late. Frankly, I think it’s a great time to push your prices up, especially with potential used vehicle stock shortages looming. Take advantage of putting some margin back into your stock as you may be facing supply cost increases in the coming months.
New vehicle stock shortages should also help the used sector increase retail prices. Keep in mind, many vehicle manufacturers have reduced/suspended production. Many component suppliers to the manufacturers are behind demand, and to top things off, the Australasian market volumes are fairly small, so manufacturers don’t often prioritise new stock order for us “down under”…
Shipping
RORO
We are experiencing some irregular patterns from our shipping services providers at present. While RORO services tend to be fairly consistent, we are constantly concerned about vessel sailings being “blanked” due to insufficient cargo. So far, we haven’t seen any further sailings reduction of late, but we remain wary should total vehicle imports drop significantly.
Container service
For ex-Japan, our main container service provider has notified us that China has priority over boxes at present as there is a large backlog of Export cargo to be moved due to earlier COVID restrictions/shutdowns. This has made things more difficult to source containers ex Japan to NZ and Australia for used vehicle shipping.
Also, Sydney Container port facilities are said to be “gridlocked” at present with many empty boxes needing to be repositioned. These are clogging up things and slowing up the discharge of freshly arriving cargo. To add to the mix, there is talk of strike action being taken but Port handling contractors.
Container services ex UK are continuing at present, but with the added complexity of port visits for cargo collection by shipping lines being “blanked” at short notice. This has meant Autohub has had to increase its ability to use different ports with different service providers and shipping lines to ensure continuity of service to you. Coupled with the varying levels of COVID restrictions in the UK., this has proved a challenge (putting it mildly), but our UK Team soldier on…
Given the Global disruption to cargo movements, I believe used car importers using container services from various markets may experience price increases and a drop in service levels over the coming twelve months…
Compliance
MPI
Currently, MPI are conducting “on-shore verification” for vehicles Ex Japan (this is a % volume audit of pre-cleared cars to ensure the BIO’s are doing their job correctly). This MPI process is usually done in Japan at the Export yards once the Border Inspection processing had been done, and before vehicles go shipside. Due to all MPI staff being recalled to NZ early this year due to COVID issues, MPI carries this out here at present.
We have noticed there has been an increase in reports of vehicle trim being carelessly removed (hanging off vehicles, broken clips, sometime damage) and our investigations so far point to this being done in Japan to ensure there is absolutely no contamination to be found by MPI upon arrival.
While we are continually trying to get more care taken at export yards, it is virtually impossible to pin down who is actually creating problems, so please bear with us. A few cars I have personally inspected at compliance that have been subject to this seemingly careless ‘interrogation’ have not been seriously damaged and put back together correctly as part of the compliance inspection process with a few extra clips being required. I think this is reasonable given the alternative could mean MPI cease doing on-shore verification which then may prevent used vehicle importation until their return to Japan.
NZTA
As many of you may be aware, all the NZTA KSDP’s (VTNZ, VINZ, AA, Drivesure) and BIO’s (JEVIC, ATJ, ATL) and any new qualifying applicants will be facing NZTA contract renewal/issue this December (Unless it gets rolled again like last year).
Autohub is talking with NZTA regularly over what NZTA may add or change with the new contracts. Its safe to say they are considering so fairly significant changes to who can do what regards Border Inspections and Entry Certification (compliance), and what data is collected at various stages of importation/compliance. It appears that auction grades will need to be supplied during the importation/compliance process, more details on who the importer and exporter is and other data NZTA now deem ‘relevant’ and ‘mandatory’ – more to come once discussions firm up into written contract content….
Autohub Services
After discussions with various dealer clients, we have decided to promote a service we offer, as it seems there is a growing need by vehicle retailers – National vehicle movement.
Many Dealers are now selling to customers out of town, and its becoming more frequent to need a transport/delivery solution.
If you are already an Autohub customer, its easy! – Just contact Phil, John, or Vincent on our Customer services team and we can provide you a pick up and drop off service for you and your customers nationally. We have at our disposal multiple modes of movement (depending where you a where your client is), so contact us to see how we be of service. Call us on 09 4117425 or email us at customerservices@autohub.
That’s about it for now…
Thank you for your continuing support and together I hope we make it through to 2021 (and a better year)…
Frank Willett
CEO