Car sales enjoy short term boom of 21%

The total registrations of motor vehicles during the first half of the year increased by 20.9% to 11,190 in January–June, from 9,258 vehicles in the same period of 2013, according to a Statistical Service report. Private saloon cars increased to 8,414, from 6,627 in January–June 2013, an increase of 27%. Of the total, 4,019 or 47.8% were brand new and 4,395 vehicles or 52.2% were used cars. However, market analysts suggest this boom is linked to two significant factors, that could turn out to be short-lived.

“Depositors who had their savings with Bank of Cyprus and have finally secured their savings in parts, after the release of 6-, 9- and 12-month fixed term deposits, would rather put these savings to good use and buy brand new cars in cash, because they no longer trust the banks and the finance schemes,” said one analyst.

“The same is also true for depositors with savings in other banks, particularly with the Cooperatives, where an air of insecurity still lingers,” he said.

The second factor was that after delaying planned purchases from mid-2012, people need to replace their old cars which are costing more to maintain and are looking for bargains, especially in the category of new luxury and new compact cars, the analyst added. Goods conveyance vehicles registrations increased by 12.1% to 936 in the first half, compared to 835 in 2013. Light goods vehicles (vans, pick-ups) increased by 16.5% to 789, from 677 in 2013.