Wexford car sales slightly down
CAR sales in Wexford fell by almost 1.5 per cent in January, according to newly-published SIMI figures.
They show that 1,058 cars were sold in the county last month, compared to 1,074 during the same month of 2016.
The figures are broadly in line with the national trend for month, with County Wexford taking 2.71 per cent of the market, against 2.7 per cent a year earlier.
A major surge in the second hand imports from the UK following the Brexit vote is a key factor in reducing the level of demand.
Car sales in neighbouring Wicklow were down 2.35 per cent, with 954 cars being sold in January just gone compared to 977 in January, 2016. Wicklow sales represent 2.44 per cent of the national market, compared to 2.46 per cent a year ago.
A major surge in the second hand imports from the UK following the Brexit vote and the collapse in the value of sterling is viewed as a key factor in reducing the level of demand.
The top-selling passenger cars so far this year are the Hyundai Tucson, Ford Focus, Ford Fiesta, Nissan Qashqai and Volkswagen Golf.
Nationally, car sales for January show that 171 registrations are down 1.7 per cent (39,019) compared to January 2016 (39,722).
Light Commercials are currently down 2.4 per cent (6,394) compared to January last year (6,555), while HGV (Heavy Goods Vehicle) registrations are down 6.3 per cent (456) in comparison to the same time last year (487).
The SIMI/DoneDeal Report highlights the strong economic performance of the Motor Industry last year, with growth in registration figures seen across all counties along with the upbeat nature of business confidence and investment reflected in commercial vehicles despite a softening of the market towards the latter half of 2016.
Jim Power Economist and author of the Review said,‘Looking ahead to 2017, while the outlook for car sales is a bit more difficult to predict than last year, the projected growth in personal disposable incomes and the availability of credit provide solid support for car sales.
‘However, the impact of Brexit and the increased volume in imported used cars are other issues that may impact on new car sales this year. Overall, though, numbers should be fairly close to last year with perhaps a slight decline of around three per cent in new car sales in 2017, which would imply new car sales of around 142,000.’
Last year the Industry continued to generate strong returns for the Exchequer with a total VRT and VAT take of €1.5 billion (26.8 per cent ahead of 2015) from new and used car sales alone.
The SIMI/DoneDeal Review outlined that the cost of motoring in 2016 which has seen an increase in petrol of 1.9 per cent and 3.2 per cent in diesel (December 2016 vs December 2015), along with the average price of a new car which has declined by 5.5 per cent.
Motor insurance costs since 2013 have increased by 61.5 per cent, although there was a slight decrease in the last quarter of 2016 by 5.5 per cent, costs in December still remained at 8.9 per cent higher than a year earlier.
Figures from Wexford-based motoring site DoneDeal show the volume of ads published in their Motor section increasing by 9.3 per cent, representing a €5.4 billion in the value of goods advertised in it.
Power, says the impact of used imports on the Irish market is likely to continue for some time.
Mr Power said used imports from the UK, propelled by the weak Sterling in the wake of the Brexit vote, will significantly outstrip the 50 per cent plus rise of 2016, when 72,182 cars were brought in.
Of the cars brought in last year, Mr Power’s quarterly review of the motor industry, says nearly half were between three and five years old.
‘ The outlook for car sales is uncertain,’ he sAID.
‘Used imports from the UK and the impact of Brexit on confidence are threats to newcar sales this year and beyond,’ he said. A further contributory factor to lower sales is that demand is lower after a period of strong ‘catch-up’ post recession.
Meanwhile, Michael Rochford, Managing Director of Motorcheck.ie said the most immediate effect of the surge in used imports will be that the value of used cars in Ireland will begin to drop due to a rise in the cheap imports. This will certainly have knock on effects in the new car market also”.
The primary reason that Irish used car prices have been high of late has been the dearth of good second hand stock from the years 2009 to 2013, caused by the slowdown in new car sales during that period. The strength of sterling against the euro prevented UK imports from filling the gap. That changed following the Brexit referendUM. ‘As cheaper stock begins to pervade the Irish market overall used car process will slide. This was always expected to happen as the boom in new car sales over the past 2-3 years would inevitably mean a healthy flow of stock starting to hit the used car market in the next 18-36 months. The consequences of Brexit however look set to accelerate this process,’ said Mr Rochford.‘ This has serious consequences for the new car market as a sharp drop in used car values may mean that the Irish vehicles coming back off PCP will be overvalued. Hence a glut of overvalued PCP’s will soon be heading for Irish dealerships or distributors. ‘Many dealers are hoping the customer will opt to hold onto the car by refinancing it or buying it out. But consumers will not want to buy a car in negative equity and banks will not finance the negative equity. So who takes the hit? ‘PCP’s have been the lifeblood of new car sales over the past three years. If used car values are hit then PCP’s will not be as affordable as in recent years.’