COVID-19 IMPACT ON NEW ZEALAND’S CAR INDUSTRY – EXPERIENCES OF CAR DEALERS FOR PERSONAL PASSENGER VEHICLES

Student Name: Malave Pathiranage Iresha Nayomi

Table of Contents

Chapter 1: Introduction 3

1.1 Research Background 3

1.4.2 Research Question 6

1.4.3 Sub-Research Questions 6

2.3 Post-Pandemic Supply Chain Management Trends in Automotive Industry 9

2.4 Research Gap 10

3.4 Time Horizon 15

3.5 Techniques and Procedures 16

Appendices 28

Appendix A Interview Guide 28

Chapter 1: Introduction

The automotive industry serves as an important pillar of New Zealand’s economy. The automotive industry contributed NZD 6.78 billion to New Zealand's Gross Domestic Product (GDP) in 2020 (2.1% of the total GDP), measured across vehicle manufacturing, sales, servicing and the production of automotive parts and accessories (MITO New Zealand, 2021). It also employed approximately 80,330 people in 2020 (about 3.1% of the total workforce in New Zealand) (MITO New Zealand, 2021). Of this, Motor Vehicle Retailing (MVR) is a significant segment that primarily involves the sale of new car sales from dealerships and used vehicle through dealerships (MITO New Zealand, 2021). MVR dealership sales is estimated to account for approximately 60% of the total automotive market revenue in New Zealand and its market size has been growing at a CAGR of 3.1 % between 2019 and 2024 (IBISWorld, 2024). MIA (2024) recorded an increase in car sales in NZ as in February 2025, 7,013 passenger cars and Sports Utility Vehicles (SUVs) were sold, up from 5,951 in February 2024 and reported strong sales from Japanese manufacturers like Toyota, Nissan and Mazda, alongside electric and hybrid models from brands like Tesla and Hyundai. Tso (2025) attributed this increase to factors such as in increase in demand for passenger vehicles due to a rebound in tourism post the COVID-19 lockdowns have been lifted. Auckland dominates New Zealand's vehicle market activity (Lyons, 2024). Yet, it was acknowledged by NZ Transport Authority in its recent reports that there had been an "interruption" to the long-run trend of growth in car travel which Hawley et al. (2020) attributed to the COVID-19 pandemic induced economic downturns as the NZ government's response to the pandemic included imposition of some of the most stringent lockdowns and border closures. McNaughton and Shepherd (2022) also explained this caused significant disruptions and lead to unprecedented financial shocks for businesses across NZ .

From a supply chain perspective, the supply shocks from the COVID-19 pandemic exposed the fragility of many critical supply chains, especially those that are long and complex and have been in pre-pandemic times optimised for efficiency at the cost of resilience. This applies to the New Zealand’s motor vehicle retailing supply chains (Abdelghafar & El-Sharief, 2020). Skilling (2022) reported that unlike larger economies with domestic manufacturing capabilities, New Zealand imports over 90% of its vehicles, primarily from Japan, Europe, China and ASEAN. Skilling (2022) explained that this heavy reliance on global supply chains makes the NZ automotive market susceptible to global supply chain disruptions as was clearly the situation during the Covid-19 pandemic which created systemic vulnerabilities within the NZ automotive industry. Mulopulos (2023) established that the pandemic exposed the fragility of just-in-time (JIT) inventory systems that has been traditionally relied upon by the MVR supply chains of NZ due to it being optimised for efficiency, albeit at the cost of resilience. The obsession with just-in-time lean inventory models left distributors unprepared for prolonged disruptions globally, notably also in NZ (Chowdhury et al., 2021; Eldem et al., 2022; Hawley et al., 2020). Eldem et al., (2022) added that for New Zealand, this vulnerability was compounded by its geographic remoteness and lengthy supply chain with China and ASEAN as shipping costs surged by 300% and port congestion stranded vehicles for months. By September 2020, national passenger vehicle inventories hit an 8-year low (Bosselman, 2020b). Bosselman (2020a) and a global automotive outlook report by DHL (2022) concurred that New Zealand’s geographic isolation and its dependency on China and ASEAN has generally lengthened New Zealand's supply chains which amplified these disruptions during the COVID-19 pandemic and left car distributors in NZ grappling with depleted inventories and shipping delays that frequently exceeded over 7–8 months. Putro and Santoso (2023) further added that concurrently there was a global semiconductor shortage which stalled production of high-demand vehicles within the NZ and thereby explained that these challenges forced distributors to diversify their supplier networks.

Existing studies on COVID-19’s supply chain impacts disproportionately focus on large manufacturing hubs, overlooking the distinct challenges of small, remote economies (Skilling, 2022). New Zealand’s automotive sector, reliant on imports and lacking domestic alternatives, faced compounded disruptions from shipping delays, inventory shortages and fluctuating demand. Yet, three critical gaps remain. Firstly, the operational adaptations remain underexplored. While macro-level impacts are documented such as in Eldem et al. (2022), qualitative insights into dealer-level strategies such as inventory diversification or digital pivots are scarce. Secondly, NZ's own geographic isolation’s role in vulnerability is not explained in dominant resilient literature. Geographic remoteness intensified New Zealand’s exposure to global logistics breakdowns, but few studies analyse how isolation shapes resilience strategies (Fehrer & Stringer, 2024). Thirdly, there is a policy-industry disconnect as the post-pandemic recovery frameworks lack integration of distributor perspectives and therefore presents risks of misaligned regulations presented by Harapko (2024). This study addresses these gaps by investigating how New Zealand’s car distributors navigated pandemic disruptions, offering a model for similar economies.

1.4 Aim of the Research, Research Questions and Sub-Questions

1.4.3 Sub-Research Questions

1. Which resilience strategies did New Zealand car distributors implement to mitigate pandemic-related disruptions?

3. To synthesise lessons for building robust, adaptive supply chains in geographically isolated economies.

Chapter 2: Literature Review

2.2 Resilient Strategies in Automotive Industry Supply Chains

Automotive dealerships and distributors implemented various strategies to maintain operations during supply chain disruptions. Florio and Brotto (2024) recorded the experience of Italian car dealerships as to how despite initially undervaluing the COVID-19 crisis's effects they transformed their business models to ensure their survival. This highlights the importance of adaptability and business model innovation for resilience in the face of a significant crisis. These dealerships also adapted their risk management processes to build business resilience against future disruptions. Such risk management practices played a role in the resilience of the Italian dealerships. In other cases, digital transformation emerged as a prominent adaptation, with dealerships rapidly deploying virtual showrooms, online purchasing platforms and contactless delivery services (Mishra et al., 2023). Many New Zealand dealerships that had previously resisted e-commerce quickly implemented digital retail solutions, including virtual vehicle tours, online financing applications and contactless pickup arrangements (Driving Insights, 2021).

Advanced technologies are being leveraged to improve supply chain visibility and responsiveness. Abdelghafar and El-Sharief (2020) found real-time tracking systems, predictive analytics and digital platforms for supplier collaboration were adopted by dealerships to better anticipate disruptions. According to Fehrer and Stringer (2024), New Zealand businesses are increasingly investing in digital technologies that provide end-to-end visibility across their supply networks.

The pandemic has accelerated shifts in consumer preferences regarding vehicle ownership and sustainability. Electric vehicle adoption has continued despite supply chain challenges, driven by environmental concerns and government incentives (Bosselman, 2020a). Warren (2025) therefore cautioned that post-pandemic supply chain management will need to address the influence of consumer choices on their dealership inventory strategies and take account of specific challenges and potential bottlenecks in NZ’s Electric Vehicle (EV) passenger car supply chain to ensure a consistent supply for the New Zealand market.

Furthermore, there is insufficient integration of New Zealand dealer perspectives into the development of policy frameworks aimed at enhancing supply chain resilience. As noted by Fehrer and Stringer (2024), effective approaches must bridge the gap between government policies, industry practices and the operational realities of businesses in the MVR segment. While existing research has examined immediate pandemic responses such as in Harapko (2021), little to no study has captured how these experiences are shaping long-term strategic changes in motor vehicle retailing supply chain management in NZ’s automotive industry.

Addressing this gap is vital because understanding these interconnections can inform policy, guide future risk mitigation and offer a blueprint for constructing automotive supply chains that are both resilient and sustainable in New Zealand's unique context. By examining how New Zealand car distributors have moved from crisis responses to institutionalised practices covering everything from inventory strategies to digital transformations this research presented crucial insights into the sector's resilience trajectory. In doing so, it ensures a more strategic approach to navigating both ongoing and future uncertainties in a world where disruptions, whether due to pandemics or other crises, appear increasingly likely.

Unlike positivism, which seeks objective truths through measurable observations, interpretivism values the rich, contextual insights that can emerge from exploring human experiences as explained by Saunders et al. (2019). This philosophical stance is particularly appropriate for this study as it allows for a nuanced understanding of how individuals within New Zealand's car industry interpreted the pandemic's challenges and formulated adaptive strategies based on their specific circumstances.

The ontological position adopted in this study accepts that multiple realities exist (Saunders et al., 2019), shaped by different perspectives and experiences of the pandemic across various dealerships. Epistemologically, knowledge is viewed as being created through the interaction between the researcher and participants, acknowledging that findings are co-constructed through this research process (Bell et al., 2019). This philosophical orientation informs all aspects of the research design, from the selection of qualitative methods to the approach taken in data collection and analysis.

3.3 Qualitative Research Strategy

This research employed a qualitative research strategy as it specifically utilises a phenomenological approach (Creswell & Creswell, 2018). Phenomenology focuses on understanding the lived experiences of individuals who have experienced a particular phenomenon in this case, car dealers who navigated supply chain disruptions during the COVID-19 pandemic (Saunders et al., 2019, p. 130). This strategy is particularly appropriate given the study's aim to explore how participants experienced, interpreted and responded to these unprecedented challenges.

This research adopted a cross-sectional time horizon as it captured data at a specific point in time rather than tracking changes over an extended period (Creswell & Creswell, 2018). The data collection phase occurred during April-May 2025. The cross-sectional approach was chosen as it fits within the time constraints of the master's program timeline. Participants provided retrospective accounts that span the full pandemic experience, from initial disruptions to current recovery efforts. This captured participants' reflections after having had time to process their experiences and identify key lessons learned five years post the pandemic first breaking.

The cross-sectional time horizon was appropriate for a phenomenological study that aimed to understand the essence of participants' experiences (Bell et al., 2019). Yet in order to understand the stickiness of the adopted response strategies, the interview questions encouraged participants to reflect on different phases of the pandemic to then provide some temporal dimension to the data despite the cross-sectional collection approach.

1. Individuals who held managerial or decision-making positions within car dealerships selling personal passenger vehicles in New Zealand during the COVID-19 pandemic.

2. Participants with direct involvement in or oversight of supply chain operations, inventory management, or procurement.

Recruitment Process

Participants were recruited through multiple processes that entailed either direct contact with dealership managers, or, via professional networking platforms (such as LinkedIn) to identify and reach out to potential participants who met the selection criteria. Snowball sampling was also utilised as initial participants often recommended other potential participants who would meet the selection criteria (Bell et al., 2019). Screening of interested individuals was performed against the sampling criteria to ensure suitability. The recruitment process aimed to secure a diverse sample representing various dealership types, sizes and geographic locations within New Zealand as the researcher sought to include representatives from both urban centres (Auckland, Wellington, Christchurch) and regional areas to encompass both luxury and mass-market vehicle segments.

Interview Development

The interview guide was be developed through a systematic process:

1. Primary impacts of the COVID-19 pandemic on supply chain operations

2. Resilience strategies implemented to mitigate pandemic-related disruptions

1. Pre-interview preparation: Participants were emailed details on information about the study, including the Participant Consent Form (see appendix B) and a general overview of interview topics, at least 72 hours before their scheduled interview.

2. Interview settings: Participants were given the option of in-person or online interviews over Zoom for participants who were geographically distant.

This study employs thematic analysis following Braun and Clarke’s (2022) approach to systematically identify, analyse and interpret patterns of meaning within the interview data as worked out in Byrne (2021). Braun and Clarke’s (2022) approach for thematic analysis offers a flexible yet robust method for examining qualitative data that aligns with the phenomenological orientation of this research. The approach facilitated the identification of both common experiences shared across participants as noted by Braun and Clarke (2022) and also offered distinctive perspectives that reflect varying organisational contexts and their pandemic responses.

Phase 1: Familiarization With the Data

Following the coding process, the analysis progressed to identification of potential themes to explore conceptual relationships among codes as was illustrated by Byrne (2021). There was examination of patterns within the coded data, development of visual representations of relationships between codes and consolidation of related codes into broader thematic categories as explained in Byrne (2021). The preliminary themes were aimed to identify recurrent patterns in participants' accounts of pandemic-related supply chain disruptions and responses.

Phase 4: Reviewing Themes

As advised by Creswell and Creswell (2018) these findings are presented in chapter 4 (findings) and further discussed in chapter 5 (discussion) where we triangulate participant perspectives with relevant scholarly literature.

3.6 Ethical Considerations

This research was conducted in accordance with Unitec New Zealand's ethical guidelines for research involving human participants. Ethical integrity was be maintained throughout all stages of the research process through several important measures advised by the Unitec Research Ethics Committee [UREC] (2019). The research commenced only after obtaining formal ethical approval from the UREC. This entails submission of the completed comprehensive Ethics Checklist form (see attached in appendix B) that details the research design, data collection methods and participant safeguards for UREC’s review and approval to ensure the study complies with established ethical standards and protects the welfare of all participants.

References

Bosselman, R. (2020b). Motoringnz. Motoringnz. https://www.motoringnz.com/news/2020/12/21/in-sickness-or-in-health-whats-the-impact-of-covid-on-car-distributors

Braun, V., & Clarke, V. (2022). Thematic Analysis: a Practical Guide. SAGE.

Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). Sage Publications, Inc. https://spada.uns.ac.id/pluginfile.php/510378/mod_resource/content/1/creswell.pdf

Deloitte. (2024, May 23). Restructuring the supply base: Prioritizing a resilient, yet efficient supply chain. Deloitte Insights. https://www2.deloitte.com/us/en/insights/industry/manufacturing/global-supply-chain-resilience-amid-disruptions.html

Florio, C., & Brotto, L. (2024). Enterprise Risk Management and Resilience in SMEs During COVID-19 Pandemic: The Case of Italian Dealerships. Management for Professionals, 249–277. https://doi.org/10.1007/978-3-031-50836-3_12

Hansen, M. (2020, July 20). Car companies continue Covid-19 fightback as NZ sales rise. Driven Car Guide. https://www.drivencarguide.co.nz/news/car-companies-continue-covid-19-fightback-as-nz-sales-rise/

Howard, P. W. (2020, April 6). Miracle in Plymouth: UAW worker celebrates Ford making 1M face shields in 13 days. Detroit Free Press. https://www.freep.com/story/money/cars/ford/2020/04/06/ford-uaw-make-million-face-shields-nypd-nyfd/2951650001/

Huang, K., Wang, J., & Zhang, J. (2023). Automotive Supply Chain Disruption Risk Management: A Visualization Analysis Based on Bibliometric. Processes, 11(3). MDPI. https://doi.org/10.3390/pr11030710

Lyons , G. (2024). Ensuring our transport system helps New Zealand thrive. In Ministry of Transport NZ. Ministry of Transport NZ. https://www.transport.govt.nz/assets/Uploads/Report/fd-summary-report.pdf

Mazey, S., & Richardson, J. (2020). Lesson‐Drawing from New Zealand and Covid‐19: The Need for Anticipatory Policy Making. The Political Quarterly, 91(3), 561–570. https://doi.org/10.1111/1467-923x.12893

Mulopulos, S. (2023). Supply Chain Resilience Policy: Theory, Practice and Action. In Ian Axford (New Zealand) Fellowships in Public Policy . https://axfordfellowships.org.nz/wp-content/uploads/2023/08/2023-08-Sam-Mulopulos-Axford-Fellow-Supply-Chain-Resilience-Policy.pdf

New Zealand Company Vehicle. (2022). Emerging and accelerating lease trends in a Covid world | New Zealand Company Vehicle. Companyvehicle.co.nz. https://companyvehicle.co.nz/article/emerging-and-accelerating-lease-trends-covid-world

RNZ news. (2021, January 10). Almost no vehicle sales in April 2020, says Motor Industry Association. RNZ. https://www.rnz.co.nz/news/business/434325/almost-no-vehicle-sales-in-april-2020-says-motor-industry-association

Saunders, M., Lewis, P., & Thornhill, A. (2019). Research Methods for Business Students (8th ed., p. 130). Pearson Education Limited.

Warren, A. (2025, January 30). Shifting gears: an economic geography analysis of Australia’s downstream automotive sector. Apo.org.au. https://apo.org.au/node/329561

Zhurova, L. I., & Moshkova, T. A. (2022). The Economic Impact of the COVID-19 Pandemic on the Russian Automotive Industry. Post-COVID Economic Revival, Volume II, 217–237. https://doi.org/10.1007/978-3-030-83566-8_14

Appendices

Appendix A Interview Guide

4. What were the first indications that the pandemic would disrupt your supply chain, and how quickly did these disruptions manifest?

5. Could you walk me through the specific disruptions you experienced in your supply chain during the various alert levels and border closures?

10. How did you adapt your inventory management practices in response to the pandemic?

11. What strategies did you implement to manage customer expectations and maintain relationships amid extended wait times?

16. Looking ahead, what key priorities do you have for strengthening your dealership's supply chain resilience in the future?

17. Is there anything else related to your pandemic experience or supply chain management that you'd like to share that we haven't covered?

Appendix B Ethics Checklist

If you intend to survey or interview human participants as part of your BSNS9000 Research Project you must first obtain ethics approval from the Course Coodinator. In order to gain approval, you must first complete the checklist below along with your proposal, describing how you intend to address each of the issues outlined. You should discuss your responses to this checklist with your supervisor. Both you and your supervisor must sign-off on this checklist prior to submitting the completed form to the course coordinator (Mitra Etemaddar) via the instructed way .

This form must be submitted by March 26.

Creswell, J. W. Research design: Qualitative, quantitative, and mixed methods approaches.

(5th ed). (Chapter 4).

Appendix C Participant Consent Form

Purpose of the Study: This study aims to investigate how the pandemic impacted car distributors in New Zealand, the strategies they used to address these disruptions, and the long-term lessons learned for building more resilient supply chains.

What You Will Do: If you agree to participate, you will be asked to engage in a recorded interview discussing your experiences during the COVID-19 pandemic. The interview is expected to last approximately 45 minutes.

Preferences/Requirements: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

Signature: ___________________________ Date: ____________

If you have any further queries about this research project, you may contact: 

Thank you for considering this request to participate in my study.

Appendix D Health & Safety Form

	School of Applied Business

To ensure that any Health, Safety and Environmental risks regarding your Research Project are identified and controlled please complete the Safety Plan/Risk Table below. 

The responsibility is on you to identify and manage hazards and for ensuring that the plan is followed.

Accident, Health, and Emergency

Environmental Effects (the effect of wind, rain, sun, extreme weather conditions – on people and property)