Is being "NZ New" important?

[hybrid 1043]

I bought an import -- love it, and still laugh at people who are stuick in their ways about the difference.

Only problem I have had was my stereo... which for that I just bought a euro spec version.. problem solved.

At the end of the day you get a just as good and in most cases better car for your money. ANND as stated before if it werent for imports we would all still be buying toyota corollas out of thames... awesome.

[Mike 1]

Sure, there were a lot of jobs being created, which was great, but the reality was that NZ had a comparative Disadvantage in Car manufacturing. It was in our best long term interests to close the car industry. Sure, there was a LOT of short term pain for those affected by job losses, but in time, they got new jobs in industries where WE DID HAVE a comparative advantage (such as dairying and forestry). Also, the best part about re allocating jobs into other sectors, was that people were working for NZ owned firms like fonterra. The profits from these firms stayed in our country and were reinvested to benefit us all.

well said, people need to stop thinking that imports (this goes for any good) are all bad. To put it bluntly we were crap at making cars (in an economic sense) much better off to have those people in the industries mentioned, and allow the rest of the population access to cheaper goods.

Edited November 14, 2008 by Mike

[briancol 3]

well said, people need to stop thinking that imports (this goes for any good) are all bad. To put it bluntly we were crap at making cars (in an economic sense) much better off to have those people in the industries mentioned, and allow the rest of the population access to cheaper goods.

Mike, as I said earlier New Zealand did not have an Auto making industry, we only ever had assembly plants.

[kingkarl 136]

I find this intriguing. Perhaps I've missed something, but aren't we still buying those same new cars off the same manufacturers, except they are now coming into the country completely built up? Those big bad overseas companies are probably making more profit assembling overseas and our balance of payments worse as a result...

Yes, that is true, ceteris paribus (all other factors remaining unchanged). But because NZ workers were re allocated into different jobs (forestry and dairying for example... eventually) we still kept our employment rate constant, with the added bonus of having people work for New Zealand firms, where the profits stay here.

I'll try and explain the theory of international trade. Suppose New Zealand and Japan can both make two (and only two) goods. One of which is cars and the other is Dairy products.

New Zealand can make either 10 cars per year or 100 tonnes of dairy products.

Japan can make either 100 cars per year or 10 tonnes of dairy product.

These different quantities result from different resource endowments. We (NZ) can make dairy very efficiently because of good pasture in our country, and Japan's labour market and high technology innovation make them superior at car manufacturing. Assume NZ wants to have some cars and some dairy products available to it's economy. So it splits it's production 50-50 between the two goods. So we have 5 cars and 50 tonnes of dairy. Japan does the same and has 50 cars and only 5 tonnes of dairy.

In total, both economies are producing 55 cars and 55 tonnes of dairy per year. However if both countries were to specialise in what they are best at, and trade the surplus both countries would be better off.

EG: NZ makes only dairy (100 tonnes) Japan makes only cars (100 cars).

NZ consumers want 50 tonnes of dairy, and the rest is surplus, so we trade this with japan. Japan only wants 50 cars, so they trade the surplus cars with us for dairy.

The result is NZ has 50 tonnes of dairy and 50 cars. Japan has the same, both countries have significantly increased the quantity of goods available to them.

Total output is now 100 cars and 100 tonnes of dairy, where as before it was 55 tonnes of dairy and 55 cars.

Unless I've completely lost the plot, it was the government of the day's decision to remove tarrifs protecting local industry that removed the incentives for local assembly, not because it it had become commercially unprofitable. I could understand this argument holding water if we had stopped buying new cars when local assembly ceased, but I'm fairly sure that new cars are still available.....

I think you mean subsidies protecting local car producers. I hope my example above is clear enough to show why NZ shouldn't bother with car assembly. Sure, we have to import new cars, which sucks but why focus so many of our resources on supporting an industry we aren't efficient at when the same amount of resources could make so much more goods in a different industry where we do have a comparative advantage.

[jjs 64]

Yes, that is true, ceteris paribus (all other factors remaining unchanged). But because NZ workers were re allocated into different jobs (forestry and dairying for example... eventually) we still kept our employment rate constant, with the added bonus of having people work for New Zealand firms, where the profits stay here.

I'll try and explain the theory of international trade. Suppose New Zealand and Japan can both make two (and only two) goods. One of which is cars and the other is Dairy products.

New Zealand can make either 10 cars per year or 100 tonnes of dairy products.

Japan can make either 100 cars per year or 10 tonnes of dairy product.

These different quantities result from different resource endowments. We (NZ) can make dairy very efficiently because of good pasture in our country, and Japan's labour market and high technology innovation make them superior at car manufacturing. Assume NZ wants to have some cars and some dairy products available to it's economy. So it splits it's production 50-50 between the two goods. So we have 5 cars and 50 tonnes of dairy. Japan does the same and has 50 cars and only 5 tonnes of dairy.

In total, both economies are producing 55 cars and 55 tonnes of dairy per year. However if both countries were to specialise in what they are best at, and trade the surplus both countries would be better off.

EG: NZ makes only dairy (100 tonnes) Japan makes only cars (100 cars).

NZ consumers want 50 tonnes of dairy, and the rest is surplus, so we trade this with japan. Japan only wants 50 cars, so they trade the surplus cars with us for dairy.

The result is NZ has 50 tonnes of dairy and 50 cars. Japan has the same, both countries have significantly increased the quantity of goods available to them.

Total output is now 100 cars and 100 tonnes of dairy, where as before it was 55 tonnes of dairy and 55 cars.

Woop woop! Go ECON101

[Guest Simon*]

Yes, that is true, ceteris paribus (all other factors remaining unchanged). But because NZ workers were re allocated into different jobs (forestry and dairying for example... eventually) we still kept our employment rate constant, with the added bonus of having people work for New Zealand firms, where the profits stay here.

If you think the big players in NZ Forestry are NZ owned and the money stays here you are sadly mistaken team

[kingkarl 136]

I've actually got no idea on what ownership stake NZ actually has in these companies, but you get what I'm trying to say haha. I imagine its a lot higher ownership percentage that what we had in toyota/honda.

[briancol 3]

They have enabled people to pretend they have money and are up the class chain where in reality they are driving a piece of unwanted rubbish from a "wealthier" country. Imports are driving people away from purchasing new cars and putting a lot of people of certain brands as they know how quick they will depreciate in our market due to Imports.

Graham, Used Japanese imports are NOT "pieces of unwanted rubbish from a "wealthier" country."

You just don't understand the Japanese system.

In Japan the Government has set in place certian laws to protect their vehicle manufacturing industry.

Insurance premiums increase very markedly for vehicles over 5 years of age.

Registration charges for a car over 7 years old is almost unaffordable.

It is far cheaper to buy a new car than trying to keep a 7 year old car on the road.

This is done to ensure that the local fleet is modern and the manufacturers are gauranteed a local market.

Not many 5-7 year old cars are rubbish, and it is far better to sell these vehicles to overseas than recycling them.

The Japanese used car market has benefitted not only Japan, but all the other countries that import them.

Don't use Australia as an example of what NZ should look like either.

Imports are rare in Australia because the government is protecting their vehicle manufacturing industry. and the average age of the Australian fleet is considerably older that the NZ fleet.

[Top Secret 2]

Best debate I've read in recent times.

You have to remember, before the imports actually started coming in, we (well not me, I was probably not even a twinkle in the eye of my dad then) were all driving around in shitty Morris's and Austins, that struggled to make it up the kaimais in one go, and if they did, they probably overheated on the other side. Imports enabled us to actually have a decent level of driving quality, and safety as well. It just so happened that yes, at the same time those once very expensive German cars are now actually affordable for average joe bloggs down the road. So what if he can't maintain it? That's his problem! And if it ends up in the scrapheap, good! That means more cheap parts for "our expensive to fix cars"

And if we had tried to keep our local manufacturing plants open (what a joke), we would have to keep pumping them with subsidies to keep them afloat. Doesn't that ring a bit true of GM and Ford asking the US Govt. for bail outs? It may not be completely related, but a company like that should be able to stay afloat of it's own means, not relying on bail outs ala. Ford and Holden.

[R90S 2]

You have to remember, before the imports actually started coming in, we (well not me, I was probably not even a twinkle in the eye of my dad then) were all driving around in shitty Morris's and Austins, that struggled to make it up the kaimais in one go, and if they did, they probably overheated on the other side. Imports enabled us to actually have a decent level of driving quality, and safety as well. It just so happened that yes, at the same time those once very expensive German cars are now actually affordable for average joe bloggs down the road. So what if he can't maintain it? That's his problem! And if it ends up in the scrapheap, good! That means more cheap parts for "our expensive to fix cars"

And if we had tried to keep our local manufacturing plants open (what a joke), we would have to keep pumping them with subsidies to keep them afloat. Doesn't that ring a bit true of GM and Ford asking the US Govt. for bail outs? It may not be completely related, but a company like that should be able to stay afloat of it's own means, not relying on bail outs ala. Ford and Holden.

I appreciate your point of view, but your post ignores a few realities. Cars of the '60s, '70s and '80s were far more reliable and robust than you're giving them credit for. As a rule of thumb, a car of that era is probably more maintenance-intensive than the cars of the last 20 years, but they were (and in some cases continue to be) quite reliable and dependable.

Many imports brought in from congested areas in Japan have arrived in NZ with little or no servicing. After all, why waste money on engine oil changes, let alone coolant or transmission oil changes for a vehicle with a short shelf life? A few trips on a NZ motorway was often sufficient to cook an engine in an import fresh-off-the-boat. Others were still fitted with snow tyres which had plenty of tread but no grip. Yet other imports (including the Euro cars) were set up for Japanese market expectations, and had suspension setups which caused some grief due to soft springs and dampers. And then we have the importers who have brought a steady stream of models into NZ which were never intended to be exported. They were Japanese domestic market models, with unique running gear in some cases and unique body panels in other cases. Your post implies that punters can expect faultless reliability from these imports, but that's simply not true.

We all agree (at least I think we do) that NZ is a small market. The manufacturers represented in NZ bring in a condensed range of models because of the cost and logistics involved in supporting the parts & servicing requirements for a reasonable model lifespan. The NZ government in its infinite wisdom then removes all barriers to all new & used imports and the result is a plethora of models with no parts or servicing documentation let alone parts & servicing support. The used Euro brands coming out of Japan, Singapore and Malaysia have enough specification variances to cause the repair industry some serious headaches at times, let alone the Japanese brands.

Safe? Reliable? Maybe for some, but not for all. And if your mate down the road, Joe Bloggs can't afford to fix his euro import? He can't afford to dump it either so he'll just drive it without a WOF for a few years until it falls apart.....

[Top Secret 2]

I understand what you're saying, just not your reasoning for saying it to begin with. Cars that were meant for Japanese domestic consumption being imported into NZ. Yes. So what? What cars are suited to our environment then? It's the prerogative of the importers what cars they choose to import. And someone in NZ must have wanted that car for whatever reason, because importers aren't going to choose cars that sit on a yard for a year depreciating. It doesn't matter if the parts needed to be imported. They're still going to be as cheap as new parts for the few cars we were assembling here.

I never stipulated that you're going to have faultless reliability. As with anything, it's going to treat you how it's been serviced in the past, no matter of where it comes from. A mid 90s Jag, in England, is going to give as much problems there as what it is here. That car doesn't come from Japan as a cheap import. What has location got to do with it? Frankly that's all I have to say on that argument, as going any further is fruitless.

How many cars from that era cooked themselves as they tried to get up the Kaimais? Or cooked the brakes on the way down? Plenty. Have a look in the Auto Trader from the mid 80s, and you'll see the biggest death traps for some extraordinary prices. Walking was a better (and safer) alternative. I'm not sure why this was a talking point anyway, it's obvious newer cars are safer, more economical, more eco-friendly (yes I just cringed), with creature comforts like leather, AC, power steering, ABS etc.

[*Glenn* 854]

What has location got to do with it?

Location and the temperate zone has alot to do with it

ie: Salt atmosphere, acid rain, polution, humidity, ambient temperature and the traffic areas or regional zones the vehicles are driven in.

[Guest Simon*]

Someone dug it up.

I'm burying it again