Farm Ireland
Independent.ie

Thursday 21 September 2017

Versatile workhorses: Growth in demand for 4x4s

Demand from farmers is helping to drive the recovery in the market for 4x4s which combine workhorse power with the versatility of a family car

Ford Kuga
Ford Kuga
Mitsubishi Pajero Executive
Hyundai Santa Fe

Eddie Cunningham ecunningham@ independent.ie

DEMAND is growing strongly for commercial 4x4s again this year- in all shapes and sizes.

It is an indication that those in farming and agri-businesses are investing in new vehicles and expanding more confidently as they see the wider economy picking up.

Like those who held onto their cars for years longer than they would normally have done so, farmers and agri-business people are beginning to change their older vehicles too.

There comes a time in the life of any vehicle where you make the choice between 'running it into the ground' and biting the bullet on repairs or bridging the gap back into a new or newer one.

Now that things are improving, it is evident that substantial numbers are switching to new.

And that explains why the market is growing in several areas - from the traditional and large two-door SUV workhorses to smaller commercial versions of well-know passenger vehicles.

And, of course, there has been significant growth - and interest - in the 'five-seater' commercials.

Indeed these remain the talk of the business.

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Their attraction stems from a change in taxation regulations some time back. Provided the vehicle meets stringent measurement criteria, you get both a commercial workhorse and a family five-seater at the same time. Crucially, these vehicles cost €10,000 to €14,000 less than their full-blown seven-seater counterparts.

Yet they have the flexibility to take five people as well as providing myriad combinations of cargo/passenger loads. You can use them as a 'commercial' all day/week and have them as your family car for shopping, matches, trips in the evenings or at the weekend.

It's one of those 'best of both worlds' scenarios that rarely crop up in motoring.

Taxation

So long as the manufacturer stamps the vehicle at the factory as 'N1' (that is the critical classification code), the Revenue Commissioners will charge VRT at just 13.3pc and, in most cases, permit road tax of €333.

That's a long, long way from the way seven-seaters would be treated for taxation purposes as they'd invoke 34pc VRT and would have cost upwards of €65,000.

The big players in that sector here in Ireland are the Land Rover Discovery Utility, Mitsubishi Pajero Executive, Toyota Land Cruiser Business Commercial and, to a much lesser extent, the smaller SsangYong Rexton W Business Edition.

Anyway, back to the overall market so far this year. As far as Toyota are concerned the outlook is encouraging.

Toyota told the Farming Independent that their Landcruiser sales from the start of the year are up around 35pc on last year. That splits nearly 50/50 between two-seater commercials and the Business-class Landcruiser. Hilux sales are up a similar amount but the two-seater only accounts for 10pc of their sales

When asked what farmers are looking for in particular when it comes to two-seater 4x4s especially, a Toyota spokesman said that reliability and reputation remain key for this market.

And as an example of the increase in purchasing within the SUV Commercial segment he pointed out that the 2,276 sold last year represented a big hike on the 1,517 purchased in 2013. Toyota added that the expectation for 2015 is that around 2,800 will be bought.

Like Toyota's Landcruiser Business Commercial, Land Rover's 5-seat Utility Discovery continues to sell well too.

Mitsubishi's Pajero Executive is the third of these 4x4 giants to benefit from the taxation regulation changes.

These are huge machines with massive towing and pulling power.

SsangYong, with their smaller Rexton W Business Edition, are in there battling for buyers too.

They have done some research on what farmers are looking for out there and say more economical engines are increasingly being prioritised.

Obviously towing capacity is important and while they don't want to compromise on power, many are seeking to move down from 3-litre or 2.5-litre, a spokesman told the Farming Independent

Add-ons and technology are regarded as bonuses but the 'deal breakers' are economy, towing capacity and off-road capabilities.

It is also interesting to hear that many people are moving away from vans into the small 4x4 market, feeling they are getting versatility to cope with different driving conditions.

An important point worth making here is that 4x4 is more than just a means of getting you across rough terrain.

It is also a safety element giving grip and traction over the tarmac where you can get slippery conditions, especially at this time of year. That's a big thing, especially if you are towing a trailer.

Comfort

Comfort is a key factor for those driving smaller 4x4s, it appears, while performance, power and economy are top-of-the-list for buyers of big 4x4 commercials.

It also looks like five-seat commercials are most popular among farmers. Two-seat commercials are in higher demand in the construction and engineering sectors.

No matter what way you look at it, there is a sense of real growth across the business.

Credit is more widely available and people can see themselves being able to meet repayments and expand their enterprise.

It is important to remember, of course, that the resurgence in buying is coming off the back of some really low-sales years.

And we are unlikely to see the sky-high levels of the boom era for quite some time - if ever.

But sales of 4x4 commercials, in whatever guise, do reflect the rising tide of confidence across some of the economy's most productive sectors.

And as they, and commercial vans, are widely regarded as being among the best indicators of real-economy activity, that can only augur well for all.

Indo Farming