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boost blog - Top 10 Automotive Predictions for 2021

Updated: Jan 15, 2021

Goodbye 2020 – Hello Change

I do enjoy a good break, and like many of us, I was glad to see the back of 2020. The Christmas and New Year break is a time to relax, spend time with family, connect with old friends and enjoy the outdoors.

It is also a time to reflect and think about the year ahead. 2020 will be remembered as unique, but 2021 will also bring many changes to the automotive world in New Zealand. Outside of the dominating theme of COVID-19 there were a number of innovations that happened because of how we had to work and shop. These innovations will gather pace, partly because COVID-19 was a catalyst for change.

Here is the Boost Auto top 10 predictions of the changes that will affect our industry in 2021.


January sales result will surprise

January’s sales month will be huge; there was significant port congestion in December, and vehicles arrived late as a result; some brands were severely supply constrained last year, and one major brand held sales back as the year closed. January’s sales will exceed the combined 9092 registrations (2570 passenger cars and 6522 SUV sales) recorded in January 2020.

Selling through Agency Model

Mercedes-Benz in New Zealand will transition to agency model sales, and more will follow. This gives the distributors more control over the quality of the purchase experience (brand experience becomes more important than sales process; dealers lose the ability to discount, the distributor owns the stock, and dealers are paid a fee for selling). 5 years ago, only Honda in NZ used the brand experience, others scoffed. In 2018 Toyota moved to agency model in New Zealand. Tesla has only been agency. Other brands will seriously start to consider the agency model locally. Honda in Australia move to agency in 2021. The shift has started and will gain pace. Some brands may take an ‘Agency Lite’ approach trying to test the idea without a full leap.

Luxury Vehicle Price War

Maybe the word choice of ‘war’ is a little over-zealous. However, one of the effects of the agency model is that it brings retail pricing down. Kia already uses fixed margin to pre-sell Stonic and some Sportage. When Toyota introduced Drive Happy Pricing because of their agency model, Toyota reduced the price of some models by as much as $15,000 (for a Hilux SR5 Limited 4x4 auto). While we might not see this level of price reduction for Mercedes-Benz, you can be sure of some price reductions. BMW will look expensive when their product team in Pacific Rise do their PVA (Price Value Analysis). So their question to answer will be, do we want to be perhaps 5% more expensive, or do we come closer? If they decide the latter route, expect the same conversation over at Great North Road at Audi HQ, and maybe even Lexus (and therefore by default Volvo).

Internet Sales

Through the lock downs we saw many businesses pivot to sell online. In the US, a country that has long resisted internet sales in automotive, necessity – as they say – was the mother of invention. Dealerships moved much closer to transacting online to facilitate sales they would not have been able to do otherwise. The process might not have been seamless and polished but it worked. Additionally, with the shift to agency online sales become more likely. Tesla, ever the innovator has paved the way, and now reserving models online has become more common for multiple brands. Consumers do it for products that five years ago we would have not considered could be bought online. Expect a major brand to offer a model or two that can be ordered and collected without going into a dealership (and without having to haggle over pricing). It will be seen as a breakthrough; it is more of an evolution.

Scrappage Scheme or Emissions Testing Spring Cleans the Vehicle Parc

Its not news that our fleet (at around 15 years old) is ancient compared to Australia, UK or USA (8-10 years old); our remoteness and love affair with older used imports are to blame. Whether an emissions testing standard or a vehicle scrappage scheme is introduced, the government will make tentative steps to tidy up the oldest, least safe vehicles and worst polluters.

The March of the PHEVS

Plug In Hybrids are coming – and coming in volume. 2020 was the year we talked about PHEVs, sometimes scratching our head about their purpose. As they become more common their benefits will become more understood. PHEV batteries are roughly 10x the size of a mild hybrid battery; they have real electric and zero emissions range yet without the range anxiety. Every major brand will have at least one PHEV in 2021. New PHEV models are likely to include Hyundai Tucson and Santa Fe, Ford Escape, Kia Sorento and Seltos, MG HS, Skoda Octavia and Kodiak, Toyota RAV-4 Prime, new Highlander VW Tiguan. Oh and market leader Mitsubishi Outlander gets a full replacement at the end of the year.

Rapid uplift in BEV and PHEV sales volumes

2021 will be the year of greener transport. The Government has already signalled it wants most of its fleet to be EV. The PHEVs are coming from virtually all the big brands. BEVS will follow later in the year and early in 2022. Virtually every month will see a new PHEV or BEV model entering the market. The shot in the arm will be some kind of feebate scheme, potentially supported by a scrappage scheme late in the year.

Hello Geely. Or BYD or Proton

We know the Chinese brands are coming – some of these brands are the biggest car companies you have never heard of. They have scale, a BEV, PHEV focus and a desire to expand into international markets. Which one will make it here first is tough to call, but expect at least one new brand you have never heard of to arrive this year.

Goodbye Holden. Now, Who is next?

February last year saw the shock announcement that GM would quit the local market. Manufacturing groups are signalling consolidation where they have multiple brands in one market. It is likely that a smaller brand will leave in 2021.

The market bounces back - almost

2021 will see a market volume rebound to around 145,000 vehicles. Here’s the logic. The NZ new vehicle market – at the time of writing which is prior to December’s registration data being released – is on track for a 2020 volume of 121,000 vehicles…. 2019 full year volume was 154,000 including LCV and HGV. Retail demand is strong, business confidence has improved, but rental company volume is soft. The economy’s resilience has surprised us, but the closed borders has restricted incoming tourists and with-it rental car demand. Rental cars account for 16-17,000 vehicles a year. Borders will re-open for next summer’s peak period and with it, rental car demand will soar as companies re-stock their depleted fleets. What’s more businesses will see increased confidence for the year ahead and will plan their capital expenditure accordingly. But some caution will remain, and its possible that we may have another localised lock-down and community COVID-19 cluster.

I am excited for the year ahead for many reasons. The birth of Boost Auto is just one of them. Happy New Year everyone, and welcome to 2021.

About Boost Auto:

Boost Auto publishes a regular Boost Blog and a new monthly Market Report and round-up. Our Market Report is available on an annual or monthly subscription and is an essential tool to assist in planning and reviewing your automotive related business. Each report will be around 800-1000 words, and include tables and commentary as well as insights. To request a free sample report and find out more please visit

Boost Auto is a New Zealand based automotive sales, marketing, reporting and insights company. Founded by Principal Anthony Maclean, who has nearly 30 years automotive experience gained in the UK and New Zealand. MacLean most recently brought the MG brand back to the local market and within 2 ½ years had created a Top 10 brand, with 13 dealers and over 3% market share.

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Boost Blog - 2021 Predictions
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