New Goverment 2023, Company winners and losers

[Jaa]

I think the used car dealers (ie 2CC, Turners etc) will be just fine. CMO may have more disruption to deal with.

Would expect a rush to buy discounted cars before the end of the year and few sales of taxed cars then a complete flip on Jan 1. That must be disruptive.

[Fortunecookie]

Would expect a rush to buy discounted cars before the end of the year and few sales of taxed cars then a complete flip on Jan 1. That must be disruptive.

So is it a short term or long term disruption?

[Baa_Baa]

So is it a short term or long term disruption?

The CCD doesn’t affect the bottom line of the retailer as it’s borne wholly by the buyer. It does affect buyer sentiment though, ergo the stock on hand and forward supply that the importers distributors and retailers will have to factor in.

Bear in mind also that this has been broadcast by National and Act for many months and the industry will have been monitoring this and adjusting as they saw confidence in Labour waning.

And one other thing, Act want to repeal the CCS as well which directly affects importers and down stream distribution and retail prices. National currently don’t support that.

There’s no doubt that the CCD and CCS have distorted the market and buyer behaviours, but in any event the supply side and buy side market has proven itself as more than capable of adapting to it.

[Fortunecookie]

The CCD doesn’t affect the bottom line of the retailer as it’s borne wholly by the buyer. It does affect buyer sentiment though, ergo the stock on hand and forward supply that the importers distributors and retailers will have to factor in.

Bear in mind also that this has been broadcast by National and Act for many months and the industry will have been monitoring this and adjusting as they saw confidence in Labour waning.

And one other thing, Act want to repeal the CCS as well which directly affects importers and down stream distribution and retail prices. National currently don’t support that.

There’s no doubt that the CCD and CCS have distorted the market and buyer behaviours, but in any event the supply side and buy side market has proven itself as more than capable of adapting to it.

"The CCD doesn’t affect the bottom line of the retailer as it’s borne wholly by the buyer."

It's exactly that.

So I was trying to understand what Jaa meant by disruption. There will be some short term adjustments, but It will ultimately come out in the wash.

[ValueNZ]

The CCD doesn’t affect the bottom line of the retailer as it’s borne wholly by the buyer. It does affect buyer sentiment though, ergo the stock on hand and forward supply that the importers distributors and retailers will have to factor in.

Bear in mind also that this has been broadcast by National and Act for many months and the industry will have been monitoring this and adjusting as they saw confidence in Labour waning.

And one other thing, Act want to repeal the CCS as well which directly affects importers and down stream distribution and retail prices. National currently don’t support that.

There’s no doubt that the CCD and CCS have distorted the market and buyer behaviours, but in any event the supply side and buy side market has proven itself as more than capable of adapting to it.

I think you're wrong about the CCD not affecting the profits of retailers, since the benefits of subsidies are split between consumers and producers. Retailers benefit as a result of increased demand in the market for EV's which leads to a greater number of sales of EVs at a higher price.

The removal of the CCD would therefore theoretically have the opposite effect, fewer sales at a lower price.

[Baa_Baa]

I think you're wrong about the CCD not affecting the profits of retailers, since the benefits of subsidies are split between consumers and producers. Retailers benefit as a result of increased demand in the market for EV's which leads to a greater number of sales of EVs at a higher price.

The removal of the CCD would therefore theoretically have the opposite effect, fewer sales at a lower price.

ValueNZ, you don't need to introduce theory, the facts are in the public domain and they don't support your supposition. There is very little net change in vehicles sold and there is until recently very little change in the prices of either high or low emission vehicles, it is the balance of low versus high emission vehicles sold that has changed.

Anyway it's hard to generalise. I'm not going to argue the toss on this, the data is in the public domain, we can all draw our own conclusions from what is essentially a social engineering experiment that may be about to end.

[Jaa]

"The CCD doesn’t affect the bottom line of the retailer as it’s borne wholly by the buyer."

It's exactly that.

So I was trying to understand what Jaa meant by disruption. There will be some short term adjustments, but It will ultimately come out in the wash.

It's obviously at least a 6 month disruption.

Imagine you are 2CC... what do you do? Get your buyers in Japan to load up on EVs, ship them to NZ, process them (a what 3+ month process?) and get them to your yards in the hope you sell them all by the end of the year? Because if you don't you will have to hold lots of EVs in stock no one will buy for a while. Or you could discount them cutting into your profit margin.

Or do you focus on a mix of EVs and gas guzzlers and end up not having enough EVs to sell in the last few months of 2023 and not enough gas guzzlers in the first few months of 2024 as demand whipsaws. Looking at their home page, I see both types!

You could also see big sales of both types and then a quiet period afterwards.

Pretty hard to get the balance right I would imagine. Inevitable there will be some stock write offs and/or margin impact.

Lead times might be even longer for Colonial with new cars.

[Jaa]

Heard Mathew Hooten say Winton Land could be affected by post election negotiations. One of Winston's demands could be the foreign buyer change National was proposing is axed. Would be on brand for Winston.

[Jaa]

"The CCD doesn’t affect the bottom line of the retailer as it’s borne wholly by the buyer."

It's exactly that.

So I was trying to understand what Jaa meant by disruption. There will be some short term adjustments, but It will ultimately come out in the wash.

The incidence of a subsidy or tax depends entirely on the supply/demand dynamics in that particular market.

This is one reason Labour's GST off vegetables was such bad tax policy. The supermarket duopoly clearly have enough market power to take most of the benefit for themselves. Labour should have proposed an anti-cartel policy targeting the supermarkets. Instead we got another pointless commissioner.

Both the new and second hand car markets are much more competitive and more sensitive to price signals. As the CCD proved, it was supposed to be revenue neutral but it stimulated demand too much, costing taxpayers millions and making it easy for National to attack. Reasonable then to think its removal will depress the market just as much.

[Rawz]

2CC chairman said petrol prices will continue to push people to EVs.