The Motor Industry Association is calling for the Transport Agency to join Australia in ordering a mandatory recall of cars containing dangerous airbags.
The Australian government has issued a blanket recall of more than two million cars containing airbags manufactured by the Japanese company Takata.
The airbags have shown a tendency to become unstable with age, humidity and heat, and can explode with fatal consequences.
At least 23 deaths worldwide have been attributed to Takata airbag explosions.
The bags have been replaced in about half the 140,000 cars in New Zealand originally fitted with them, and the Motor Industry Association spokesperson David Crawford said the rest should be denied warrants of fitness until their bags have also been replaced.
"If we're going to make it mandatory... the only way to do it is to incentivise people to have it closed out and if they don't respond to letters you then say 'well we have to take the car off you,'" he said.
The Transport Agency said any decision on a blanket recall is up to the Commerce Minister, Kris Faafoi.