There wouldn’t be many government ministers who had a bigger influence on the automotive industry in 2018 than Kris Faafoi.
The minister of commerce and consumers affairs’ most significant move hit when he implemented a mandatory recall of all vehicles with alpha Takata airbags in April.
However, proposed changes to the Credit Contracts and Consumer Finance Act (CCCFA) and coming up with accessible vehicle finance options and alternatives to vehicle ownership for low income people also come under his remit.
Faafoi sat down with AutoTalk in his Wellington office recently to discuss the rollercoaster ride that was 2018.
While Faafoi is happy 65% of alpha airbag affected vehicles have been repaired so far, he acknowledges initially it was difficult to manage the situation with so many different parties involved, including the new and used car industries, and government departments.
“It’s trying to manage [organisations like] MBIE and NZTA working together on a large issue.
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Now the appropriate systems have been set up to identify affected vehicles, Faafoi says the next challenge is getting to the last 35%.
A communications campaign will soon kick off to encourage people to get their vehicles fixed.
That’s on top of last year’s efforts, which included about 600 vehicles being repaired following a reminder from the NZ Transport Agency, rather than the vehicle manufacturer.
“A bit of NZTA backing helped get people off their backsides.
A government-sponsored reminder achieved a good response.
“If you go quiet on it, people will forget.”
However, he’s not ruling out using tougher measures, like unrepaired vehicles with alpha airbags being unable to receive a warrant of fitness.
“We’re starting to think about warrant of fitnesses,” he says.
The most recent figures show 55,314 or 65% of all affected vehicles have been repaired.
That includes 36,611 used imports or 57% which have been repaired, while 18,703 New Zealand new vehicles or 89% have been fixed.
In terms of potential changes to the CCCFA, proposals include capping the total interest and fees charged on loans, introducing tougher penalties for irresponsible lending, and raising the bar for consumer lenders to register as a Financial Service Provider.
Faafoi hopes to make progress on the changes in the first half of 2019.
“A lot of feedback from the lenders is there are some ratbags out there.
Car lenders are quite happy to see the changes we are proposing.
“There aren’t many people out there who don’t want to crack down on loan sharks.
It will be interesting to see how they respond.”
His office will also continue to work with the Financial Inclusion Industry Forum on making vehicle finance and alternative forms of transport more accessible for low income people.
“Alternative modes of transport and shared transport is becoming more common,” Faafoi says.
“It’s aimed more towards low income households and how do we make that work in low income households.”
