Sales of new cars suffer ‘Brexit’ effect

NEW car sales have suffered a slump as buyers switch to importing used vehicles from the UK to cash in on the drop in the sterling exchange rate caused by Brexit, official figures show.

There were nearly 17,000 new cars licensed last month – a drop of almost 4,300 or 20% compared to last year.

But a surge in private car imports of almost 7,800 outstripped the slump, meaning the total number of cars taxed for the first time was actually up by more than 3,400.

February’s new car total figures were also down as 2016 was a leap year so garages and dealers had an extra day of sales.

Alan Nolan, of the Society of the Irish Motor Industry, said: ‘We have been anticipating lower numbers in February compared to 2016, with Brexit continuing to impact on used vehicle imports, with fewer working days this year and with less hire-drive cars because of a later Easter.’

Industry figures are predicting total annual sales of around 140,000, compared to 147,000 last year.

Car buyers are cashing in on the slump in sterling by importing nearly new used cars from the UK at a massive discount because of the fall in the currency.

The UK currency went from 76p to the euro before the Brexit vote to 87p now. For car buyers, that means bargains.

A 2016 E class 220D Mercedes sells for around £28,000 in the UK, the equivalent of €32,300 at current exchange rates. But before the UK voted for Brexit the same car would have cost more than €36,400.

An SIMI spokesman added: ‘We always knew this year was going to be hard with Brexit and we don’t know what the story is with consumer confidence either. Also are people saving for something else like house deposits? We just don’t know but Brexit is definitely an issue.’

Registrations for the first two months were 43,573, down 4,706 or almost 10% on last year’s figure of 48,279.

In February 16,905 new private cars were taxed for the first time, a decrease of 20.2% compared with February 2016. A total of 7,723 imported used private cars were also taxed for the first time, a rise of 52.1% on the same month last year, the CSO reported yesterday.

There were 5,077 imports last year, 2,646 fewer than this year.