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Boost for car sales in April but outlook remains glum

Wednesday, 15th May, 2019 4:27pm

Registrations of new cars in Ireland took an unexpected jump upwards in April.

Sales rose by 10.3 per cent compared to April 2018, with 8,923 cars finding new homes (or at least new numberplates…) compared to 8,053 in the same month last year.

It’s an unexpected figure when set against the overall landscape of new car sales, which continue to fall. Even accounting for April’s heartening figures, overall sales are down by 8.5 per cent year-on-year.

According to the Society of the Irish Motor Industry (SIMI), the only vehicle segments that have seen rises since the start of the year are electric cars and used imports.

It’s those used imports — thanks to buyers chasing better value in the UK market, driven by the continued Brexit-affected weakness of sterling — that are still hurting the Irish car trade and indeed the Irish exchequer.

SIMI estimates that the national tax take from new car sales has fallen by 3.98 per cent so far this year to €722 million. The number of used cars imported so far this year stands at 35,717 — up by 2.75 per cent on this time last year. 8,886 used cars were imported in April, virtually matching the total number of new cars sold.

It’s suggested that the total number of imports could all-but match the total number of new car sales by the end of the year; a predicted 112,000 new sales against a potential 101,000 used imports.

Brian Cooke Director General, SIMI commented: “This rise in new car registrations for the month of April is in reality a timing issue. Easter is a key period for car-hire business and with it falling later than usual in 2019, this pushed some car-hire that normally occurs in March into April.

“The real indication of the new car market environment is the year to date figures, which show a decrease on last year. The outlook for the remainder of the year is still very uncertain for the industry. Looking forward to 2020, with the next phase of the WLTP testing due for implementation, it is vital for the industry that any changes to taxation systems are flagged well in advance of their implementation date to allow the industry plan their businesses in a normal and effective manner.”

Jim Power, economist and author of a report for SIMI said: “It is still a challenging environment for consumer-facing businesses as the personal sector is pressurised due to a combination of high and rising housing costs, an onerous personal tax burden, subdued wage growth over the past decade, and Brexit is an overhanging dark cloud that is creating major uncertainty and caution in the psychology of consumers and businesses across the economy.”

The overall cost of motoring is also rising. The average price paid for a new car has risen by 3.9 per cent so far this year, a reflection that those who are buying new cars are spending more on higher specifications and extra equipment. While insurance costs continue to trickle down little by little (down by 5.9 per cent this year) fuel is going up again; petrol prices are up by 0.2 per cent, while diesel has risen by 5.5 per cent.

Sales of diesel-engined cars continue to fall, although they are still the most popular type of vehicle overall, accounting for 48 per cent of the market. Petrol cars take up 40 per cent, hybrids for eight per cent, plugin-hybrids for 0.98 per cent, and electric cars 2.3 per cent.

The fall in diesel sales is continuing to push up emissions from Irish cars — average CO2 emissions for new cars sold were 1.5 per cent higher in the first quarter of 2019 when compared to a year earlier.

In terms of what’s selling, the Nissan Qashqai has taken over from the Hyundai Tucson at the top of the sales charts, followed by the Toyota Corolla, Skoda Octavia, and Volkswagen Tiguan.

The Corolla was the best-selling car in April, as supplies of the new model finally came fully on stream. The best selling brand for the year so far is Volkswagen, followed by Hyundai, Toyota, Ford, and Skoda.

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