Should we go all in on kei cars?

New Zealand’s car market is currently dominated by medium and large SUVs and utes, mirroring a national preference for roomy, powerful vehicles. Yet our average commute and daily usage are low, and most trips are less than 7 km, China, (see sidebar), so in reality there is little real reason we buy what we do. 

To put it another way, travel to Japan, Europe and China or most of Asia, and you won’t see as many big cars on the road as you see here and in Australia. Most of the big car countries are…big countries: the USA, Canada, Australia, and New Zealand. Can you spot the odd one out? 

There’s a compelling opportunity to encourage the import of kei cars from Japan—compact, affordable and economic vehicles that thrive in urban settings, whose interior space belies their diminutive exterior, and which blend practicality, efficiency, and availability. Interestingly, many K-cars in Japan are light commercial vehicles too.  

Why availability?  Because around a third of new cars sold in Japan are Kei cars, that’s a lot

of used vehicle supply.  

Powered by small engines (or small electric motors) and lightweight, these vehicles consume less fuel and less space, which translates to significant long-term savings for both businesses and everyday drivers. Lower emissions from kei cars also support New Zealand’s ambition to create a cleaner, more sustainable transport sector by reducing pollution from conventional vehicles. 

Safety. 

When we talk about safety, we inadvertently talk about safety of the occupants of a vehicle, while conveniently ignoring the safety of other road users, including pedestrians and cyclists. Smaller and lighter vehicles are safer for other road uses. They have better visibility too. However, New Zealanders favour larger vehicles, and kei cars typically offer less occupant protection in crashes compared to many larger SUVs and utes.

Advancements in technology are improving safety standards in these small cars. Like many newer cars, keis often have a full ADAS suite—the effects of which should not be underestimated. AEB, like ESP before it, is a major contribution to crash reduction, and things like Blind Spot monitoring and Lane Keeping Assist help reduce accidents too. ESP has been one of the most singularly effective crash reduction interventions ever deployed—the NZ government has cited a 30% reduction in loss-of-control crashes attributable to ESP—whereas AEB has been responsible for reducing rear-end crashes by around 50% according to Mitre¹.  

The challenge remains that the biggest issue with kei cars is not their own safety standards but how we view the safety standards of other road users and the size of the other vehicles on the road.

The role of legislation and incentives. 

Let’s not pretend we don’t already use incentives to shape the market. Even after the watering down on the CCS, tax policy plays a part. There’s a reason you rarely see utes in Europe or Japan. For most markets a commercial vehicle can’t also be a personal vehicle in the way a ute can here. Generally, four seats equal a passenger vehicle, and two (or three) seats equal a commercial vehicle in many markets (plus or minus some rules about windows behind the driver or some weight limitation).  

To foster kei car adoption, the government should consider introducing incentives, such as lower registration and license fees for smaller, lighter vehicles (and conversely, higher fees for larger vehicles). With RUC reform around the corner, road user charges for all could also play a role in shaping vehicle selection. Such measures would encourage more people to choose kei cars while signalling a broader commitment to smarter, more efficient transport. 

Kei cars offer real advantages: cost savings, reduced emissions, and better mobility for city dwellers. The opening question – can you spot the odd one out? – is worth sitting with. New Zealand is not a big country. We just buy big cars. With thoughtful policy, credible incentives, and an honest conversation about safety, that could change. The move towards kei cars isn’t a radical idea; it’s a practical one. 

Side bar: 

Source: https://www.nzta.govt.nz/assets/resources/travel-planning-toolkit/docs/resource-1-facts-and-figures.pdf 

How we really travel in NZ.

The driver was the sole vehicle occupant in two-thirds (68%) of trip legs in cars, vans and utes.  

• 48% of driver trip chains are less than 6km long.  

• 53% of driver trip chains are less than 7km long.  

• 65% are less than 10km long. 

Boost Auto is a New Zealand automotive consultancy based in Auckland. Founded by Anthony MacLean, a senior automotive executive with over 30 years of experience across the UK and New Zealand, Boost Auto works with car dealers, vehicle distributors, and OEM brands on sales performance, dealer network development, sales training, workflow automation, and market entry strategy. Boost Auto has supported brands including Ford, MG, JAC and Turners, and works with dealer groups including Colonial Motor Company, Ebbett, Andrew Simms and Tristram.