Number of Motor Vehicles

The total number of motor vehicles licensed in New Zealand is forecast to increase by 1.3% in 2025-26, to reach 4.72 million motor vehicles. Growth in the population aged 18 and older is expected to push up demand for motor transport, supporting an increase in the total number of motor vehicles in 2025-26. However, population growth rates are set to be more modest than over the past two years, driving expectations that motor vehicle growth rates will slow. Growth will be backed up by an anticipated improvement in consumer sentiment and the first significant increase in household discretionary income since 2020-21. Both these factors will combine to increasingly allow consumers to afford new cars. An expected decline in retail petrol prices over the course of 2025-26 will also promote more motor vehicles on the road. As private motor transport becomes more affordable, people who had let their registrations lapse will re-register vehicles, driving up motor vehicle numbers. Despite this positive outlook, the potential implications of US tariffs on foreign trade partners threaten to drive up motor vehicle prices in 2025-26, particularly if traditional manufacturers in China and Thailand become less competitive. However, a decline in US demand for foreign cars could drive down prices in the New Zealand market, as an excess supply forces manufacturers to offer more favourable terms to buyers. These highly volatile factors are likely to underpin the attractiveness of new motor vehicle purchases in 2025-26.

Growth in the number of motor vehicles typically follows population growth. An increase in the size of the population of driving age increases the potential market size and demand for motor vehicles. New Zealand has a graduated licensing system, with drivers able to obtain a restricted license from 16.5 years of age. However, over the past few years, one-off events have induced fluctuations in demand for new and used vehicles. The pandemic and related issues in the global automotive supply chain led to a decline in new car registrations, as waiting times at dealerships soared and distributors struggled to deliver cars to the New Zealand market. In addition, the Central Government’s travel restrictions severely limited international tourism over the two years through 2021-22, leading to a decline in the number of taxis and rental cars licensed over that period. On the other hand, monthly new car sales reached a record high in June 2023. Pent-up demand from delayed purchases during the pandemic and delayed deliveries due to supply chain issues contributed to these spikes in sales at the end of lockdowns. 2023-24 also saw the largest recorded increase in the population aged 18 and older, further supporting strong growth in the number of motor vehicles in use. While population growth slowed slightly in 2024-25, it was still higher than average, contributing to the 1.4% expansion in motor vehicles over the 12-month period.