Happy New Year to VIA’s members. Over the holidays, I’ve been mulling the question of “What will this New Year bring?”

Making predictions is always a bit of a fool’s game – the number one quote is: It’s tough to make predictions, especially about the future. Nevertheless, let’s take a swipe at this because recent changes in a range of regulations will impact the vehicles being sought by customers and what can be imported to meet that demand.

The updated vehicle exhaust emissions rules taking effect from April 2024 will require petrol vehicles to have an exhaust emissions code of DXX- or better and be first registered in 2012 or newer. Diesel vehicles will need to have an emissions code of LXX, FXX, MXX, RXX, or QXX or better. These changes will make a huge dent in the van market that may cause headaches for tradies and other small businesses looking for a replacement vehicle or expanding their fleet, potentially pushing their choice towards older diesels.

The removal of Clean Car Discount (CCD) incentives for electric vehicles (EVs) will impact the demand for low-emission vehicles. The scheme ended on 31 December, removing rebates and the so-called "ute tax." A recent report from Germany noted that, a year after removing their version of an EV incentive, sales of plug-in vehicles dropped by more than 50 per cent.

The CCD scheme did swing the needle towards low-emissions vehicles coming into New Zealand, but the too-early shift of its scope to exclude efficient, low-emission ICE vehicles and hybrids ignored the realities of what sorts of vehicles everyday Kiwis could afford and needed.

The annual CO2 target under the Clean Car Standard (CCS) has also changed and will further impact the shape of the vehicle import market. Some vehicle traders will have credits under the CCS system they can use to offset the importation penalty for higher carbon emitting vehicles. However, there are also many traders sitting on stock that last year attracted a fee under the CCD regime and they will find the many customers out there who have been waiting for the chance to purchase those previously penalised vehicles.

These regulatory changes impacting the types of vehicles being sought by customers will lead to uncertainty and volatility in vehicle sales this year. The thing is, though, no-one wants all this uncertainty in the market; it can stifle innovation and progress and make both traders and consumers hesitant about their purchasing decisions.

I have long said, change is needed and change is coming, but we need to plan the change better rather than buffet the industry like a pinball from one extreme to the other with constantly changing import regulations. We cannot flip a fleet of four million ICE drivetrain vehicles overnight to electrified; we need to encourage progressive step-change, moving people to lower emissions in affordable and manageable timeframes.

I believe that a more sustainable and environmentally friendly transport system can be achieved without negatively impacting the vehicle importation industry through regulatory uncertainty. This happens through recognising the benefits of lower emitting, efficient, small engine ICE vehicles, and encouraging more substantial use of hybrids as the next leg of our journey towards a future of more electrification.

(As seen in AutoTalk).