Greetings,
As you may know, the Government is looking to put in place changes to the range of vehicles (new and used) that NZ imports, so that the Climate Change accords NZ has signed up to can be worked towards meeting targets.
The current Policy being focussed on (The “Clean Car Standard”), in it current form, will see some fairly hefty penalties being applied to many vehicles we currently import – some will become uneconomical to continue importing.
Please read below and take a look at what’s being proposed – you may need to start thinking about how your business will cope/react should this Policy be put into place.
MTA’s Response to the Government’s Clean Car Announcement
Dear Vehicle Dealer/Importer
As you’ll probably be aware, yesterday the Government announced that it will introduce a CO2 import standard for vehicles imported from 2022.
The aim is to reduce the average emissions from passenger vehicles to 105g by 2025. The targets do differ for some categories of vehicle.
You can read the Government’s announcement here >>
At this time there are few firm details. Based on the previous consultation held in 2019, we expect that penalties for exceeding the CO2 targets could range from perhaps $50/g for used cars up to $100/g for new cars.
Importers will need to start reporting CO2 numbers in 2022 and penalties will be imposed from 2023. Waka Kotahi/NZTA will develop a system for tracking and estimating an individual importer’s running CO2 balance.
MTA considers the proposed CO2 targets and timing to be very aggressive. They will serve to increase the price of most ICE vehicles, given very few will meet the targeted CO2 rates. Alternative options, such as EVs, are more expensive and are expected to be so for some years to come. In short, motoring in general will be more costly.
You can read our media release highlighting our concerns that the resulting high prices may discourage people from getting newer vehicles and they may churn through the existing fleet. There needs to be a robust scrappage scheme and meaningful incentives for people to purchase newer, cleaner, safer cars.
The standard will change the automotive landscape like nothing else we have ever seen.
The announcement leaves us with more questions than answers:
What will prices look like? This depends on the penalty rates imposed.
Will people rush out now to buy a big vehicle while the opportunity exists?
Will people keep their existing vehicle longer because they won’t be able to afford to change?
Will people be happy to sell their existing larger gas-guzzler for a lower fuel use, smaller and perhaps less safe car?
Will less financially able consumers be disadvantaged?
We know from past experience that our Dealer members will move to meet whatever demand comes through this new market. The bigger question is ‘How will consumers respond?’.
We are very concerned that the existing fleet will be held onto and churned through private sales, exacerbating our already old-aged fleet. MTA has been consistently warning that vehicle maintenance is on the decline, as indicated by the 41% WoF failure rate and the increase in fatal crashes with a vehicle factor (11%).
MTA will monitor the progress of legislation and raise your concerns with officials as the new rules are debated and finalised. We will keep you updated on this so you can adapt to the changes.
If you have any initial feedback or questions, contact Tony Everett, MTA Sector Manager – Dealers:
E: tony.everett@mta.org.nz
P: 04 381 8827
M: 027 457 4340
Thanks for your continuing support.
Team Autohub.