Tuesday 6 December 2016

Car dealers expect even more closures

Published 02/09/2011 | 05:00

CAR dealerships are bracing themselves for more job losses following a lacklustre summer in which the sale of new cars plummeted following the end of the scrappage scheme.

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Only 3,242 new cars were bought nationwide in August compared with 5,035 last year, a drop of 36pc according to figures released yesterday by the Society of the Irish Motor Industry (SIMI).

The end of the state-sponsored scrappage scheme on June 30 was cited as a major factor in poor sales volumes.

"It was always expected that we'd see a reduction after the scrappage scheme ended. But it has had a large effect," a SIMI spokeswoman said.

And if the trend continues, dealers fear a return to the dark days when 10,000 jobs in the industry were lost between last summer and the start of the recession in 2008.

"Definitely, more garages will close," the spokeswoman said last night.

The number of new cars sold to date this year is almost half of the normal sales volumes, she added.

"There has been approximately 80,000 to 90,000 new cars sold in 2011 compared to 150,000 each year, which is needed to break even."

SIMI director general Alan Nolan added: "Some stability and employment had returned to companies in the sector over the last 18 months but business has remained very difficult."

Close to a third of all new cars sold in August 2010 were bought under the scrappage scheme, he said.

The final quarter of 2011 and the first quarter of 2012 will "be a massive test" for the future of the industry, SIMI added.

Irish Independent

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