People are buying more cars because they are feeling richer because of rising property values, the Motor Trade Association says.
Latest electronic card spending figures by processing company Paymark shows spending at motoring outlets – which includes repairs, retail shops and car sales – increased in value by 7.9% in November compared to the same month in 2011.
Overall, the value of card spending across all sectors in New Zealand rose 4.6%.
The sharpest increase in sales growth was among hardware stores with 10.4% growth, which Paymark says is consistent with the trend of more spending on housing in general.
MTA spokesman Ian Stronach says a lift in the hardware sector often goes alongside an increase in spending on cars.
"Cars are a confidence area of the economy. A lot of people are feeling wealthier as the value of their house goes up, which has a flow-on effect to vehicle sales.
"A bit like housing, a car is something people can see and touch, which perhaps makes them more inclined to spend money on it."
Mr Stronach says the increase in spending is led by car sales, while the car repair sector remains steady.
Yesterday the MTA reported the number of new car sales in November was up 15% on the same month last year.
Christmas party season under way
Paymark head of sales and marketing Paul Whiston says a 9.3% increase in spending at cafes and restaurants suggests the Christmas party season has swung into action.
There was also a 10% increase in spending at liquor outlets in November.
However, he says the increase could be also due to there being one more Friday last month than in November 2011.
The region to show the biggest increase in spending by value was Waikato with a 6.5% jump, followed by Cabterbury (5.7%) and Auckland/Northland (5.2%).
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Business Week in Review with Grant Walker & Andrew Patterson
- The kiwi dollar has spiked against the pound in one of the biggest one day currency moves in history. NBR’s Jason Walls breaks down the dollar’s movement
- What Brexit now means for NZ, with NZIER John Ballingall
- Dr Oliver Hartwich says everyone should stay calm and carry on
- Matthew Hooton on making a moral case for social capital