Dealers who are finding business sluggish at the moment now have an official report to back their views.

The latest ANZ-Roy Morgan consumer confidence report shows clearly that while New Zealand has been out of recession for more than a year, a return to consumers opening their wallets is taking some time.

"It looks like households will remain cautious with their spending for a while," says the report. "It seems the negatives are outweighing the positives in the consumers' minds at present."

Dealers looking to improved business will be disappointed at a downward trend in the number of people feeling that "now is a good time to purchase a major household (car) item".

With the shortest day of the year a month behind us, the auto industry can look forward to better days in the warmer weather ahead.

But it will be some time yet before consumers feel confident enough about the future to really start spending big time, again.

South Island dealers still feeling effects of recession

Another auto industry observer has voiced his concerns that in spite of buoyant used import numbers, many dealers are still finding the winter tough going.

"The effects of the recession are still being felt - at least - this is the view of many of the dealers I am visiting," says Paul Carruthers, South Island representative for Autohub.

"Most dealers are reporting significantly low levels of enquiry and an apparent lack of consumer confidence.

"Most note that things were steadily inmproving until the Reserve Bank adjusted interest rates upward again recently, and the ETS was introduced," says Carruthers.

"The announcement of a GST increase in October seems to have added to the confusion. In simple terms, it would appear that the discretionary income normally applied to purchasing large ticket items - such as cars, furniture, or large consumer electronics - seems to be under pressure, with the public being unusually risk-averse at this time."

Carruthers adds that many New Zealanders also forget that, every winter, billions of dollars of tourism spending evaporates out of our economy.

"This has a huge flow on effect if the economy is already unsteady. I strongly suspect that particularly good tourism figures (in light of the recent recession) over the 2008/2009 summer season, probably helped create the impression that we were bouncing back from recession faster than we possibly would have been without the tourists' spending.

"Indicative of this is the drop in unemployment over the summer months, contrasted by the significant rise in unemployment figures quoted again in yesterday's Herald," says Carruthers.

"There is no oversupply of cars in our market as such - but rather, I would describe the current situation as more of a lack of demand, based on an overwhelming lack of consumer confidence.

"Most cars sold by dealers are to people who are looking at repayments of $60 - $100 per week (disposable income). This area has been hit hardest by the recent rises (and ongoing uncertainty) in mortgage interest rates, confusion about how the ETS will affect monthly costs such as electricity etc.

"Most dealers feel there is unlikely to be much of a surge in sales in anticipation of the rise in GST on October 1st. They point out that, while they cannot raise prices to offset the GST rise, many of the suppliers they use in the process of getting their cars prepared for sale have indicated that their charges will increase, squeezing the dealers at both ends.

"Sadly, all of this is happening at a time when dealers could (and possibly should) be shouting from the rooftops that cars will probably never again be cheaper than they are now, in this country," concludes Carruthers.