New Zealand Used Car Market

New Zealand Used Car Market Overview

• The New Zealand Used Car Market is valued at NZD 470 million, based on a five-year historical analysis. This growth is primarily driven by increasing consumer demand for affordable transportation options, coupled with a growing trend towards sustainability and environmental consciousness. The market has seen a significant rise in the number of used vehicles sold, reflecting a shift in consumer preferences towards cost-effective and reliable alternatives to new cars.
• Auckland, Wellington, and Christchurch are the dominant cities in the New Zealand Used Car Market. Auckland, being the largest city, has a higher population density and a greater number of dealerships, making it a hub for used car sales. Wellington and Christchurch also contribute significantly due to their strategic locations and robust local economies, which support a vibrant automotive market.
• In 2023, the New Zealand government implemented stricter emissions regulations aimed at reducing carbon footprints from vehicles. This regulation mandates that all used cars imported into the country must meet specific emissions standards, encouraging the sale of more environmentally friendly vehicles and promoting the transition to electric and hybrid models.

New Zealand Used Car Market Segmentation

By Type:The used car market in New Zealand is segmented by vehicle type, which includes various categories such as hatchbacks, sedans, SUVs, utes/pickups, vans/people movers, coupes/convertibles, MPVs/crossovers, and others. Among these, SUVs have gained significant popularity due to their versatility and spaciousness, appealing to families and outdoor enthusiasts. Hatchbacks and sedans also maintain a strong presence, particularly among urban dwellers seeking compact and fuel-efficient options. The demand for utes/pickups is driven by the agricultural sector and tradespeople, while vans/people movers cater to larger families and groups.

By Age of Vehicle:The segmentation by age of vehicle includes categories such as 0-3 years, 4-7 years, 8-10 years, and over 10 years. The 4-7 years category dominates the market, as these vehicles offer a balance of affordability and reliability, appealing to budget-conscious consumers. Vehicles aged 0-3 years are also popular, particularly among first-time buyers and those looking for nearly new options. Older vehicles, while less popular, still attract buyers seeking lower prices and specific models.

New Zealand Used Car Market Competitive Landscape

The New Zealand Used Car Market is characterized by a dynamic mix of regional and international players. Leading participants such as Turners Automotive Group, Trade Me Motors, 2 Cheap Cars, AutoTrader New Zealand, Autoport, NZC — New Zealand Car, Paul Kelly Motor Company, Enterprise Motor Group, AA Motoring (AA Vehicle Inspections & AA Preferred Dealer Network), VINZ — Vehicle Inspection New Zealand, VTNZ — Vehicle Testing New Zealand, Autoshop/Dealer Finance: UDC Finance, Driveline Fleet, Armstrong’s (Armstrong’s Auto), Eagers Automotive NZ (formerly AHG NZ) contribute to innovation, geographic expansion, and service delivery in this space.

New Zealand Used Car Market Industry Analysis

Growth Drivers

• Increasing Demand for Affordable Transportation:The New Zealand used car market is experiencing a surge in demand, driven by the need for affordable transportation options. In future, approximately 90,000 used cars were sold, reflecting a 15% increase from the previous year. This trend is supported by a growing population, which reachedapproximately 5.3 million, and rising living costs, prompting consumers to seek budget-friendly alternatives to new vehicles.
• Rising Environmental Awareness and Preference for Used Vehicles:Environmental concerns are influencing consumer preferences, with a notable shift towards used vehicles. In future, sales of used hybrid and electric cars increased by 25%, indicating a growing awareness of sustainability. The New Zealand government aims to reduce greenhouse gas emissions in line with its emissions budgets under the Zero Carbon framework, which is designed to put emissions on a downward path, supporting uptake of lower-emission vehicles, thus driving market growth.
• Growth in Online Car Sales Platforms:The digital transformation of the automotive industry is reshaping how consumers purchase used cars. In future, online sales accounted for 40% of all used car transactions, a significant increase from 25% in the past. This shift is facilitated by platforms like Trade Me and AutoTrader, which provide comprehensive vehicle listings and user-friendly interfaces, making it easier for buyers to access a wider range of options and enhancing overall market accessibility.

Market Challenges

• Supply Chain Disruptions:The used car market in New Zealand faces significant challenges due to ongoing supply chain disruptions. In future, the average time to source a used vehicle increased by 30%, primarily due to global semiconductor shortages and shipping delays. These disruptions have led to inventory shortages, making it difficult for dealerships to meet consumer demand, ultimately impacting sales and market stability.
• Regulatory Compliance Costs:Compliance with evolving regulations poses a challenge for used car dealers. In future, the implementation of stricter emission standards is expected to increase operational costs by an estimated NZD 1,500 per vehicle. This financial burden may deter smaller dealerships from maintaining inventory, leading to reduced competition and potentially higher prices for consumers, which could hinder market growth.

New Zealand Used Car Market Future Outlook

The New Zealand used car market is poised for continued evolution, driven by technological advancements and changing consumer preferences. As digital platforms become more prevalent, the purchasing process will likely become increasingly streamlined, enhancing customer experiences. Additionally, the growing interest in electric and hybrid vehicles will create new segments within the market, catering to environmentally conscious consumers. Overall, the market is expected to adapt to these trends, fostering innovation and competition among dealers.

Market Opportunities

• Expansion of Electric and Hybrid Used Car Segments:The increasing demand for electric and hybrid vehicles presents a significant opportunity for the used car market. There are nowover 100,000 light electric vehicles on the road in New Zealand, indicating a growing fleet that will progressively enter the used market in future.
• Growth in Car Subscription Services:The rise of car subscription services is reshaping vehicle ownership models. In future, subscription services grew by 20%, appealing to consumers seeking flexibility. This trend offers dealerships an opportunity to partner with subscription platforms, providing a steady revenue stream while catering to a new demographic of users who prefer access over ownership.