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In this issue

Dear Lease driver,
New car sales record in 2015
Get ahead of the latest Steering Column
Accounting changes finally coming
Major road works underway
New-look website

Dear Lease driver,

We’re fully into the swing of 2016, but there’s plenty of summer yet to come. In this edition of On the Horizon you can read about new car sales, which hit a record high last year, and have continued strong into 2016. There’s a preview of the latest Steering Column magazine, plus a reminder about roadworks around the country and news on the new accounting standards. Safe travels!

New car sales record in 2015

If you think the roads are getting busier and more full of cars, you might be onto something: more than quarter of a million cars joined the queues on the roads in 2015. A new record number of new car registrations was set last year, with 286,722 imported used or new cars producing a 4 per cent net increase in New Zealand’s vehicle fleet.

New vehicle sales also reached a new a record high, with 134,041 registrations, up 6862 over 2014. Motor Industry Association CEO David Crawford said this is the first time new registrations have broken through the 130,000 barrier.

Toyota was far and away the top-selling marque overall, its 20 per cent market share led by its Hilux and Corolla models, but the perennially popular Corolla was pipped to the post as the top-selling new model by the Ford Ranger. A total of 6818 new Rangers were registered, ahead of 6520 Corollas and 5623 Hiluxes. This is the first time a commercial model has outsold a passenger vehicle overall.

The top three passenger vehicles were the Corolla, Toyota’s Rav4 and the Holden Commodore. In the luxury sector, Mercedes, BMW and Audi all enjoyed around 2 per cent market share, selling between 2095 and 1765 new cars.

Statistics show two-thirds of the 134,242 new vehicles sold last year were bought by businesses, rental companies and government.

SUVs continue to dominate the New Zealand market, accounting for just over one out of every three sales (34% of the market), with a total of 45,376 registrations during 2015.

‘2015 will likely be remembered as the year in which the New Zealand new-vehicle registrations soared while the New Zealand economy showed weaker growth in the face of several unfavourable economic indicators at home and abroad. The breadth of new models with increased performance and comfort features, combined with competitive prices and a high level of choice makes New Zealand one of the most competitive new car markets anywhere in the world,’ said Crawford.

Get ahead of the latest Steering Column

The new year maybe underway but there’s still time to make resolutions for a happier, healthier 2016. In the summer edition of LeasePlan’s Steering Column magazine, ‘Dr Feelgood’ — mental health champion Dr Tom Mulholland — talks about how to look after what’s in your head and enjoy a happier and more productive life. There’s also the outlook for the economy and the leasing sector, and some page-turning summer reads. Check it out.

Accounting changes finally coming

After years of deliberation and several drafts, the new lease accounting standards are to be introduced by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) . The new IFRS leases standard (IFRS 16) was issued on 13 January and the US Generally Accepted Accounting Principles (GAAP) lease standard, Topic 842, is expected be issued by the FASB in February.

These new lease accounting standards are designed to eliminate off-balance-sheet accounting for clients subject to the international financial reporting standards (IFRS) or US GAAP rules. Clients will have to start working with the new rules in about three years’ time; the effective date will be in 2019 for those subject to IFRS and December 15, 2018 for companies subject to the US GAAP rules. Both the IASB and FASB have decided to permit voluntary early adoption of the new standards once they are released.

LeasePlan New Zealand Commercial Director Johannes Jacobs (JJ) says clients may want to start looking at the way in which their company accounts for vehicle lease contracts, in preparation for the changes.

‘Despite the accounting changes, leasing remains attractive, as it continues to offer many advantages over outright ownership: service and administration, provision of finance, cost predictability and removal of residual value risk, for example,’ says JJ. ‘In order to support and advise our clients as well as to create commercial opportunities regarding this topic, LeasePlan will keep you informed on how these changes may affect you.’

Major road works underway

Summer is the season of roadworks, and several new projects are underway around the country, making the most of the fine weather.

Works began in late January on removing the side-by-side passing lanes on the section of high-risk highway on State Highway 3 between Hamilton airport and Ohaupo. The four-lane section of road will be remarked as three lanes, with room for a flush central median to separate oncoming traffic. Passing lanes will be retained southbound for 1 km from the new roundabout being built at the intersection of State Highways 3 and 21 (Airport Rd), and there will be two lanes northbound from Kaipaki Road for 1 km. A wire rope barrier will also be installed at the central changeover point.

The whole project, including the new roundabout, will be completed by May.

In the Bay of Plenty, a stretch of State Highway 2 north of Tauranga is also undergoing a $1.8 million upgrade to make the road safer. A section of highway between Wainui South Road and Sargent Drive will be repaired and widened, and a wire rope central median barrier installed to prevent head-on crashes.

The New Zealand Transport Agency’s Bay of Plenty highway manager Niclas Johansson says the agency is committed to improving safety for everyone on that section of State Highway 2. Around $5 million has already been spent in the past year on safety improvements designed to prevent head-on crashes on the road.

On the other side of Tauranga, major works are now underway on the Baypark to Bayfair Link Upgrade project, with the first stage being the relocation of the railway line.

The NZTA is now almost halfway through its largest ever programme of summer maintenance works in the Wellington region, with major works still ahead for the Featherston town centre and Chapel Street in Masterton.

Check out what’s going on in your region at www.nzta.govt.nz/projects

New-look website

Keep an eye on www.leaseplan.co.nz at the end of March for the first stage of a new look and feel for the LeasePlan New Zealand website. Further changes and improvements will be made throughout the year, so the new look is just the start of great things to come.