New car sales in the first half of 2017 (totalled 91,185) declined by 10 per cent when compared to new cars sold during the first half of 2016. Figures from the Society of the Irish Motor Industry (SIMI) highlight that a combination of factors, including rising housing, rental and health insurance costs and uncertainty surrounding Brexit, were affecting disposable income spending and making consumers cautious about purchasing big-ticket items such as new cars.
Some cost of motoring figures in the report include: petrol prices up 5.8 per cent, diesel prices up 10.4 per cent on May 2016, average price of a new car down 4.1 per cent on May 2016 and insurance costs 8.4 per cent lower than May 2016 but average insurance costs were 43.9 per cent higher than in May 2014,
During the first six months of the year, new car sales declined in every county, with Donegal experiencing the largest decline at 18.6 per cent, while Cavan had the smallest decline of 4.4 per cent. New car sales in Dublin accounted for 40.6 per cent of the total new car market, the SIMI/Done Deal report showed.
The market share for hybrid vehicles increased from 1.6 per cent of the market in the first six months of 2016 to 3.2 per cent of the market in the same period in 2017, according to the report. At the same time, there has been what they describe as a welcome rebalancing of the diesel and petrol market shares and it says that it is likely that this trend is set to continue toward equality between the two fuel types.
Registrations of new diesel cars, reduced from 71 per cent of the market in the first six months of 2016 to 66 per cent of the new car market in the first half of 2017. There was a small decrease in new petrol car sales, which were down just 1 per cent and they accounted for 30.2 per cent of all new cars sold during the first half of 2017.
Used car imports continue to grow
Imported cars, the vast majority of which (97%) are from the UK, continued to be a significant part of the overall car market, the review found. It showed that during the first half of the year, 46,004 used cars were imported, which represented an increase of 42.6 per cent compared to the first half of 2016. It’s also up considerably on the same period last year.
The review also highlights that nearly half (49%) of all imported used cars during this period were five years or older, while the diesel share of used imports is just over 79%.
Sterling weakness and a scarcity of second hand cars due to the collapse in new car sales from 2009 onwards, were the main factors behind the strong increase in used imports.
The report also shows a number of price decreases in the cost of motoring. The average price of a new car in May 2017 was 4.1 per cent lower than a year earlier, while the cost of motor insurance in May 2017 was 8.4 per cent lower than it was a year earlier.
What’s it looks like for the rest of 2017
So what’s in store for the rest of the year? Based on the July 172 new car registrations being down -7.14 per cent (to 27,748), so the first 7 months of 2017, the new car registration market is down at -9.36 (to 118,925). In addition, light commercials/vans also down -8.48 per cent (to 3,963), the second half of the year looks like it needs the uncertainty surrounding Brexit to be dealt with urgently, and the political inactivity in Northern Ireland is not helping with this. Another indicator of uncertainty and paused investment can be seen by a fall of -21.77 per cent (to 309) in new truck/heavy commercial vehicles.
It also appears that with regard to used car imports, the trend is set to continue as the Euro is strengthening month on month against Sterling.