Car dealers are turning to Britain as a potential major source of used cars as new exhaust standards threaten to drive up the price of vehicles from Japan. The weakest pound in a generation has car importers scrambling to create relationships with British sellers.
John Davies, managing director of Autohub, which imports thousands of used cars a year to New Zealand, said the company was "throwing quite a lot of money" at developing a supply chain for buying ex-lease cars in Britain, which he believes offers an opportunity to source bulk supplies of used cars for New Zealand.
About 200 mainly luxury cars a month are imported from Britain at present, but Davies predicts a spike in British imports, mostly European brands that would retail for about $15,000 or higher.
"People are waking up to the fact that there's a good source and a good supply of cars that work in New Zealand, where the dealer can make a reasonable margin," he said. "England has got the capacity to produce anywhere between 2000 and 3000 cars a month," around a third of all used imports.
New emission standards that take effect on January 1 will exclude Japanese cars manufactured before 2005, which dealers fear will put available stock beyond the reach of many Kiwis.
Already importers were facing increased competition in Japanese used-car auctions from Chinese buyers, and the impact of the tsunami in March is expected to restrict the supply for several years.
In Europe, a continuing financial crisis threatens to push Britain back into recession, sending the pound to its weakest level against the Kiwi dollar in 30 years.
Though many New Zealanders consider the "normal" exchange rate with Britain has $3 buying 1, in recent months 1 has cost less than $2, making imports from Britain cheaper.
Despite shipping costs from Britain double that of Japan at around $3000, importers believe cheap wholesale prices there can overcome the difference.
Davies says companies that account for the bulk of used imports were racing to take advantage while the European currencies were "sick".
"Between us we probably control about 75 per cent of the market. We're all over there, and we all believe in it." Autohub expected to launch a website for dealers to buy directly from Britain within weeks.
Buyers are likely to be offered mainly European brands previously leased to companies or private individuals. A high proportion are diesel, most with manual transmissions.
Some dealers warn that servicing cars not common in New Zealand would be more expensive, and that British imports could suffer from rust caused by salt used to grit roads in winter.
But the Automobile Association said if importers focused on models already sold new in New Zealand, servicing costs would be kept down, and anti-rust measures had improved dramatically.
"There's a good chance that this could be good news for drivers in New Zealand," spokesman Mark Stockdale said. "European cars tend to be of a higher specification, so they will have more safety features, and they could be more fuel-efficient."
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