Ask the motor industry association (MIA), the organisation that represents New Zealand new-vehicle distributors, how the market is going and it will use phrases like "relentless dip", "steep decline" and "distressing trend in falling registrations" (all quotes from its most recent media release).
While light commercials are holding steady, the SUV and passenger-car market is running 13.3% down on the same time last year. Plug-in vehicles have simply run out of charge, with battery electrics accounting for just 5% of that diminished market year-to-date.
Ask Toyota NZ chief executive Neeraj Lala how his brand is going and he says: "From a sales perspective... exceptionally well. If you look at the straight data, you'll see that Toyota is down about 0.8% on 2023. And 2023 was a record year for us.
"So this may be our second-best year [ever]. Our share has grown from around 20% to just under 24%. After the first 5 months of the year and before some of the rentals might kick in on the back half, you'd be looking at 23.5 or 24%."
It's not just a case of Toyota doing well by percentages in a smaller market. Lala says the company currently holds around 8000 backorders for various models; effectively, for every vehicle it delivers to a customer, another name goes straight onto a waiting list. It's not really catching up with demand.
Lala's mention of rentals is worthy of note, given Toyota said it was moving away from that market when it launched its new pricing and dealer/agent strategy back in 2018. But the reality is the only two Toyota rental vehicles in the stats year-to-date are Hilux and Hiace, and they account for just 113 of the total market's 3328 rental registrations.
"We've got a few more rentals going in this year because we've got to keep the Thames community alive [where the company has a major processing facility]," says Lala, only half joking. "If we didn't sell them in rental, I believe we could sell them at a higher margin at retail. It's a balancing act."
What the secret to Toyota NZ's success?
Predictably, Lala says Toyota simply has the right products and the right model mix for the times. But it's hard to argue with, based on the numbers. He also agrees that in times of economic trouble, it's natural for buyers to gravitate to a trusted brand.
Lala also says Toyota's willingness to offer a diverse range of products and powertrains, even when some work against it achieving the Government's Clean Car Standard targets, has ensured plenty of choice for consumers.
"Fact is, our hybrid range is going really well, the lineup we’ve got is going really well. We’ve been really transparent about the fact we’re going to offer the full range, but that we will limit the volume of some models [such as Hilux]."
"With Land Cruiser Prado, we’re bringing it in because it’s got such huge legacy and customer following; you can’t not bring it. But you can’t bring 2500 of them [the number of orders Toyota NZ is holding for the new model]; our EV volume for this year was forecast at double what it’s probably going to be, and when you loose 50% of that EV volume it hurts your weighted [emissions] average. It’s a real balancing act."
Not having invested heavily in EV vehicles on the back of the now-defunct Clean Car Discount has certainly helped Toyota's position in the current climate. Other NZ distributors have thousands of unsold EVs on the ground and massive discounts are now the norm.
“Look, we’ve never been against EV, we’ve always just said there’s a time," explains Lala. "We’ve committed to having a full range and a big thing with the commercial lineup is that we can offer that full lineup. But to be honest there’s even been a bit of a question mark around hybrid Hilux with customers; the pessimism in that market moving to something like that is still there.
"It’s a time thing. We’ve never been against the technology, it’s just what the transition looks like."
Lala does admit Toyota teams have to do better educating potential buyers on new technology: "It's not just an issue for our customers, it's an issue for our salespeople. If I'm being honest, I think the quality of product e-learning in our sales teams is poor. It's something we've addressed... we've said it's unacceptable."
Clean Car and the future
The Clean Car Standard, which introduces progressively more stringent average emissions targets each year, will play a major role in shaping the local car industry. It's currently under review.
"It’s likely the Minister is going to make some changes," says Lala. "My guess is it will be on timing rather than change the targets.
"Now that the Aussies have introduced their [own standard], we can align ourselves with them from 2027 and everything becomes more manageable.
"One of the conundrums we’ve got is that currently, those targets are based on commercial and passenger cars, and we initially raised a flag to say it should be commercial, SUV and passenger.
"By 2027-28 Prado has the demand of emissions the same as that supplied to Yaris, and that doesn’t quite fit. The consequence is that SUVs will become a lot more expensive; the flipside is there’ll be pressure to electrify your SUV lineup faster.
"So I get it and we're not losing sleep over it. But it’s potentially an issue and we’ll cover it in the next review, in 2 years."