New Zealand’s automotive sector has hit the brakes to start 2025, with Motor Industry Association (MIA) data showing new vehicle registrations totaled 10,863 units in January—a 14.1% drop compared to January 2024 and a 13.0% decline from January 2023. The figures, released by MIA Chief Executive Aimee Wiley on February 5, highlight ongoing challenges for the market as it adapts to shifting buyer behavior and economic pressures.
While these numbers reflect a continuation of industry-wide recalibration, segments like hybrid vehicles and medium SUVs demonstrated resilience. Hybrid registrations surged to 3,082 units, capturing 28.4% of the total market—a sharp increase from January 2024’s 18.7%. Battery electric vehicles also showed moderate growth, climbing to 595 units (5.5% of the market) from 273 units (2.2%) in January 2024. Despite these gains, internal combustion engine (ICE) vehicles continued to dominate with 6,708 units, though this figure is down from January 2024’s total of 9,791.
SUVs and Hybrids in the Spotlight
Medium SUVs claimed the top spot among vehicle segments, accounting for 25.2% of new registrations, followed closely by compact SUVs at 23.7%. The Toyota RAV4 led the pack as the best-selling model for the month, with 1,023 units registered (up from 618 in January 2024), reflecting its strong reputation for versatility and efficiency. The Kia Seltos and Mitsubishi ASX also placed high on the leaderboard, emblematic of growing consumer preference for compact SUV offerings.
“A comparison with January 2023, a more stable market period, signals a broader trend of decline across all vehicle segments,” said Aimee Wiley. The elevated numbers in January 2024—driven by the removal of Clean Car Discount penalties—make the current dip more pronounced by contrast.
Challenges Ahead for the Market
While the uptake of hybrid vehicles is robust, Wiley stressed the pace of transition toward lower-emission vehicles must accelerate to meet New Zealand’s updated CO2 targets. The pathway forward will require balancing regulatory compliance with affordability and ensuring vehicle availability aligns with evolving consumer demands. Despite an uptick in hybrids and some improvement in electric vehicle uptake, these segments have yet to rebound significantly or surpass expectations.
“The challenge is managing this transition without driving up vehicle costs or causing supply issues,” Wiley explained. “Market resilience will rely on collaboration across the industry and the ability to provide vehicles that meet both regulatory demands and everyday consumer expectations”.
A Snapshot of Buyer Trends
Private buyers accounted for 39.6% of January’s purchases, up slightly compared to 32.0% in January 2024. Business buyers remained the majority, representing 51.7% of registrations, though this marked a dip from 53.6% last year. Rentals experienced a sharp decline, falling from 13.0% of registrations in January 2024 to just 6.3% this year, as the market continues to adjust from post-pandemic travel spikes.
On the horizon, the industry’s ability to adapt to evolving market dynamics will be under scrutiny. With SUV demand remaining strong and hybrids gaining traction, manufacturers will need to double down on innovation to meet sustainability goals without pricing out consumers.
For car buyers and enthusiasts alike, 2025 is shaping up to be a year of transition in New Zealand’s motor industry. Stay tuned for what’s around the next bend.
