New car sales have reached their highest level since 1984.
Figures from the New Zealand Transport Agency show sales of new vehicles in the March quarter were up 14 percent compared to the same period last year.
Sales of used imports also increased during the period, up 32 percent from a year earlier.
Infometrics economist Benje Patterson said rapidly improving domestic economic and labour market conditions are helping drive an increase in demand.
"We've also got the New Zealand dollar at extremely elevated levels and that's keeping the price of new vehicles at quite a subdued level."
People had been buying smaller vehicles but over the past few months the trend was toward growth in sales of larger cars, he said.
Mr Patterson says he expects sales will pick up this year both for new cars and Japanese imports.