Exhausting some options

Car prices are set to rise next year due to a change in emissions rules. Photo by Stephen Jaquiery.
Car prices are set to rise next year due to a change in emissions rules. Photo by Stephen Jaquiery.
Cheap used cars imported from Japan have been the transport of choice for budget-conscious New Zealand motorists for almost a quarter of a century. But dealers who import the cars say the good times are about to end. They claim the Government's new exhaust emissions rule, that comes into effect on January 1 next year, will make Japanese imports unaffordable for many. Mark Price reports.

Take the Toyota Vitz - a small five-door hatch.

At the moment you can buy a 2001 Vitz freshly imported from Japan for about $10,000.

But from January, importing the 2001 model will not be allowed.

Neil Cottle, of Auto Court car sales yard. Photo by Peter McIntosh.
Neil Cottle, of Auto Court car sales yard. Photo by Peter McIntosh.
If a car dealer wants to import a Vitz it will have to be a 2005, or later, model.

And, a Vitz like that, says one dealer, will retail for at least $16,000.

The same will apply to all other Japanese makes and models, leaving those looking for a cheap Japanese import with some painful choices.

Will those wanting a Vitz, for instance:

• Bite the bullet and pay the $16,000?

• Buy a new Vitz instead, for $23,000?

• Or simply drive an old Vitz until the wheels fall off?

Veteran second-hand car dealer Neil Cottle, of Dunedin car yard Auto Court, expects the minimum price for a newly imported used car from Japan will be $15,000 next year rather than the $10,000 at present - a result of the new emissions rule.

"It eliminates the affordably priced vehicles; the ones that are in the most demand.

"It's a matter of where do the people who want a $10,000 car get one?"

Mr Cottle believes importers will be forced to slash the number of cars they bring in and that will lead to jobs being lost, including his own, if his yard is forced to shut down.

He wants the Government to ease the pain for buyers and save the jobs by delaying the new rule for two years.

"If I was the Minister of Transport sitting at a cabinet meeting I'd be saying, 'if this is going to cost us this much in unemployment benefits for a lot of people and we lose the tax we would normally get from a lot of people, are we not best delaying it?'."

The Otago Daily Times took Mr Cottle's concerns to the office of Transport Minister Stephen Joyce, which responded to each inquiry with an avalanche of emailed material.

These thousands of pages track a saga going back to the beginning of the century and beyond - a saga that goes something like this.

In the beginning, the Japanese Government would make the emissions rules, the Japanese new-car manufacturers would follow them and New Zealand's laissez-faire approach meant it just imported whatever cars Japanese drivers were finished with.

But, in 2003, the New Zealand Government began setting its own emissions rules.

The object was to ensure New Zealand imported only used cars with up-to-date emission controls, safety features and fuel-efficient engines.

A 2006 cabinet business committee did note that as the rule was updated it would be necessary to also consider "other impacts, including social and economic impacts".

Then came the current debate, beginning in about 2007, when the Government started the process to ensure all imported Japanese cars would meet Japan's 2005 emissions rule.

It considered applying the new rule from 2010 but then settled on January 1, 2012.

Mr Cottle says as a result the number of Japanese imports will plunge from 80,000 this year to about 20,000 next year.

He has raised his concerns in a letter to Mr Joyce but believes the minister is not listening.

Before making its decision to update the emissions rule, the Government did consult widely.

It also did receive a submission from the Imported Motor Vehicle Industry Association asking for the two-year delay - a suggestion Mr Joyce rejected on advice from government officials.

The advice, contained in an October 2010 file note released under the Official Information Act, shows the officials did not believe importers' predictions.

"We do not think that a 50% reduction, over 2010 import volumes, in 2012 is actually likely."

The note also questioned the credibility of second-hand car importers saying: "It should also be noted that on each occasion in the past 10 years that the Government has sought to apply minimum standards on used vehicles, for example seatbelts, frontal impact and exhaust and climate change emissions, the [vehicle importers] ... have consistently predicted the imminent collapse of the used vehicle market and consequent rise in vehicle prices because of the new policy.

"Despite their claims, the trade continues, albeit we understand with lower profit margins and fluctuating volumes."

Mr Joyce was reported earlier this month saying importers had predicted the demise of their industry "on a number of previous occasions".

"Instead, your members have proven to be resilient and adaptable."

Mr Cottle argues the economics of the Japanese import trade have changed since the Government made its decision to introduce the new emissions rule.

Currency exchange rates between New Zealand and Japan had added more than $2000 to the cost of buying a car in Japan and the tsunami had damaged Japan's car manufacturing industry and also created extra demand for vehicles to replace those lost in the tsunami.

"None of those things were there when the legislation was brought in and that is all the more reason why they could easily extend it for two years."

He has asked Mr Joyce to take another look at the issue.

Mr Joyce's officials conceded in the October 2010 file note a two-year delay introducing the rule would have little impact on air quality.

"The New Zealand vehicle fleet is so large [approximately three million light vehicles] that differences to the overall fleet as a result of the import of plus or minus 50,000 vehicles in any year are almost imperceptible.

"Because of the size of the existing fleet, air quality... would not suffer measurably if the Japan '05 standard was delayed by one or two years, but it would suffer if it was never introduced."

Mr Cottle suggests the new rule will actually increase exhaust emissions rather than reduce them.

"It will force [potential buyers] into retaining their old car, getting it more worn out and causing more environmental damage ..."

Treasury agreed with him during the 2008 debate.

It predicted a "net increase in emissions" as people held on to their old vehicles for longer.

But one of the country's leading air-quality scientists, Dr Gavin Fisher, does not consider the emissions from old cars being kept for longer will outweigh the advantages of a general modernisation of the New Zealand vehicle fleet.

"Even if the great fraction of people keep their car a couple of years longer, the total emissions from the fleet will be reducing and that's a gain."

Dr Fisher was the first to put a number on premature deaths in New Zealand each year due to vehicle emissions - 399 in 2002 - with six of those deaths in Dunedin and 253 in Auckland.

He says the effect of having a few older cars on the road for longer - as Mr Cottle suggests will happen - would not have a great impact on effects such as mortality.

"It is there; it is probably quantifiable but it's a very small number."

Dr Fisher says health problems caused by vehicle emissions were a long-term issue and not greatly affected by a short-term event.

"A classic is somebody like a courier on a bicycle who is running around town.

"I get asked by them... because I'm in the emissions from buses all day long, is my life going to be shorter?

"And I say, well you might cough a bit and if you have asthma don't do it, but it is only if you do it over a lifetime. That's where these health effects come in."

So, buyers strolling through car yards this afternoon have plenty to ponder.

Do they jump in and buy a pre-2005 Japanese import that will be cheaper or go with a 2005 or later Japanese car that will be dearer but cleaner, and probably safer and more fuel-efficient?

Or do they simply not buy?

Mr Fisher believes some buyers might grumble initially but would soon forget the change.

"The benefits in terms of not just air quality but fuel consumption and safety and so on are very, very clear."

But others, including Mr Cottle, believe some people will simply be priced out of the market.

- mark.price@odt.co.nz



Breathing more easily

Those most likely to have their health affected by air pollution are those over 65, infants, particularly those under one year, people with other respiratory problems and people with chronic diseases such as heart disease.

A 2007 study for the Ministry of Transport concluded air pollution - from domestic, industrial and vehicle sources - led to 1079 premature deaths in New Zealand each year, but also caused other hospital admissions and visits to the doctor.

A 2004 study showed vehicles accounted for 399 of the premature deaths and contributed to air pollution a number of substances:

Particulates - very fine particles that can be visible but are often not obvious. They are associated with increased premature mortality, and exacerbate a number of respiratory and cardiac problems.

Carbon monoxide - a colourless, odourless gas that affects mortality slightly, but exacerbates heart disease and causes drowsiness and learning difficulties.

Nitrogen dioxide - a slightly brown gas that causes breathing problems and exacerbates asthma and other respiratory problems.

Sulphur dioxide - a pungent gas that causes sore throat and eyes and can have an effect on mortality. It is not usually present in hazardous concentrations in New Zealand.

Ozone - a colourless gas that is present naturally but causes severe breathing problems in high concentrations. It is not currently a serious problem in New Zealand.

Benzene - a component of petrol (along with numerous other hydrocarbons) which can lead to cancer.

Air toxics - a whole range of other toxic compounds, including complex organic chemicals, process chemicals and heavy metals. Little is known about many of these.

Source: Health Effects Due to Motor Vehicle Air Pollution in New Zealand, by G.W. Fisher, 2002.



Keeping the bangers rolling

Freelance motoring writer Sam Stevens is picking motorists will put more effort into their old cars to avoid the expense of upgrading.

"People will be quite resourceful in terms of keeping older cars on the road and there will be associated changes in the industry to keep an ageing vehicle fleet going."

He cited the number of "perfectly reliable" 30-year-old Japanese cars still on New Zealand roads as evidence of how well they can last if properly maintained.

"They are mostly owned by students and people who need cheap cars. Inexpensive cars. Affordable cars."

A former dealer who did not want to be named did not, however, expect New Zealand to regain its 1960s reputation for having one of the world's oldest vehicle fleets.

At that time, he said, overseas funds to buy new vehicles were hard to get and, as a result, car owners looked after their vehicles "far, far better" and kept them longer.

He believed the new emissions rule could have the same effect, with some people being unable to upgrade their old car.

"They are going to go to trade it in and they are not going to be able to take the step from their old car to a new car therefore they are going to hang on to them for longer."

He had already seen the price of cheaper cars such as 1994 and 1995 Toyota Corollas rising.

"They are going to be harder and harder to find, the cheaper cars, and the price is going to go up as well."

He could see more work for mechanics because the electronic systems of cars made them too difficult for most home mechanics to fix but, on the other hand, cars lasted longer mechanically.

"I don't think we will become famous for having the oldest fleet of cars in the world as we have been known before, but I do believe things are going to change quite radically."


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