Anyone who has been in the importing business for more than five minutes knows that “the economy” is never a single story. Right now, the headlines look encouraging: inflation is back inside the Reserve Bank’s 1-3 percent band, economists are penciling in rate cuts by August, and a string of Government announcements promise to trim compliance clutter from AML and health-and-safety rules. After two grim years, that feels like sunlight breaking through.

Yet in the same week I sat down with several Tier-1 members and a major vehicle lender, the contrast could not have been starker. One operator has just booked the best quarter in its history, offloading stock as fast as it lands. Another, importing since deregulation began, has closed up shop. Lending arrears seem to be edging down in the top credit bands but rising among the sub-prime crowd. The recovery, if that’s what this is, is moving in two gears.

The good news – and its limits

Inflation and rates. Annual CPI at 2.5 percent is bang in the middle of target. Market pricing now implies three Official Cash Rate cuts before the end of this calendar year. For households that rolled on to 7 percent mortgages last year, every 50-basis-point drop is real money in the pocket – and real room to upgrade the driveway once confidence returns.

Regulation lightening. Draft changes to the Health and Safety at Work Act should spare “low-risk” yards from board-level paperwork gymnastics, while the first phase of AML reform hints at risk-based supervision. The operative word, unfortunately, is hints. Until supervisors apply a single, proportionate rulebook, small traders will still spend more time photocopying passports than selling cars.

Commodity tailwinds. A softer kiwi dollar is lifting farm-gate returns, and regional freight hubs are already seeing the benefit. When agriculture breathes, so do the second-hand utes and light trucks that follow it.

The shadows in the tunnel

Tariff turbulence. The US–China tariff tit-for-tat has already bounced container spot prices and clogged shipping schedules. Japanese exporters tell us New Zealand is slipping down their priority list as higher-margin African, European, and even Russian buyers pay cash and skip our compliance complexity. Volumes look as though they will still run under 100,000 units for the year – well below the volume needed to refresh a four-million-vehicle fleet.

Compliance that still bites. The Clean Car Standard’s weight adjustment and $27-per-gram penalty continue to punish the very light petrol and hybrid cars Kiwi families can afford, while heavy high-spec SUVs sneak through on relatively less pain. Until that formula is fixed, importers will battle an artificial price hurdle even if interest rates fall.

A two-speed customer base. The Treasury’s latest update sketches a classic K-shape: well-capitalised businesses in protein, logistics and tech are hiring again, but discretionary retail and metro construction remain flat. At ground level that means a stream of $25-35,000 finance-approved buyers – and a trickle of cash-strapped drivers hunting a $7,000 stopgap. Anything in the middle can sit for weeks.

Rising corporate failures. Insolvency practitioners quietly report a lift in small transport and accessories firms throwing in the towel. Often the trigger is a single bad GST quarter or a bounced payroll. That may not grab headlines, but it hollows out the service ecosystem the import trade relies on.

What to watch next

1. Phase-Two AML rules (due late 2025). If the Government doesn’t nail proportional risk ratings, small yards could be stuck with city-law-firm processes forever.

2. Health-and-safety bill detail. Director-duty changes look good, but vagueness around “operational managers” could simply shift liability down a title.

3. OCR track. Three cuts are priced in; any upside inflation surprise wipes that out. Lock-in funding costs where you can.

4. Shipping lanes. Persistent schedule gaps ex-Japan will pressure landed costs and stock turn. 

5. Clean Car Standard tweaks. VIA will publish an analysis of the CCS shortly: we will call for the removal of the weight adjustment, focus the financial penalty on the energy not the vehicle, and let scrappage earn credits – or watch volumes slide further.

So, sunlight or train light?

Right now, it’s both. A genuine cyclical upswing – falling rates, easing prices – is underway, but it is narrow. If you’re in the right segment, with clean stock, conservative gearing and bullet-proof processes, you’ll feel the warmth first. If you’re carrying aged inventory, reliant on marginal borrowers, or wedded to a single supply channel, that headlight may be a freight locomotive.

Our job as an Association is to keep the track clear for you: fight for fair, proportionate rules; keep supply lines open; and give members the data to steer by. Your job is to stay nimble, keep liquidity high, and shout early if the tunnel starts closing in. Only then will sunlight – not head-light – be what greets us on the other side.