New car sales to hit 100,000 as confidence rises again
Published 09/05/2014 | 02:30
THE number of people buying new cars is forecast to soar to 100,000 next year as economic confidence improves.
That would mean 15,000 to 20,000 more purchases than is widely projected for this year – and would create thousands of new jobs. It is estimated that every extra 1,000 new car sales generates 130 jobs.
The prediction was made by economist Jim Power at the publication of a report into the sector. He also forecast that 120,000 people could buy a new car in 2017, provided the Irish and global economies continue to improve.
His report says there is a new, if fragile, confidence across the industry which reflects a more optimistic outlook generally. Dealers are reporting more inquires, orders are up and new car sales are running 27pc ahead of 2013.
Mr Power's detailed study also reveals:
* The average price of a new car this year is 2.7pc lower than a year ago;
* We are buying 'greener' cars; emissions are almost 24pc lower than in 2008;
* Cars bought this year are 4.8pc more efficient than last year;
* Petrol prices were 5.3pc lower in March than a year ago;
* Diesel prices were 4.7pc lower;
* Insurance costs were 4.4pc higher;
* New and used car sales contributed almost €763m in taxes to the Exchequer last year.
But the report warns that two major trends could still threaten jobs – rising numbers of used imports, and the fact that despite increasing new car sales, the numbers are still very low.
There is an expectation, however, that new car sales will rise to what is regarded as the minimum number of 100,000.
There are still major hangovers from the economic crash. The average age of our cars is steadily increasing because so few new ones were bought in recent years. SIMI chief Alan Nolan said that by September of next year the average age would be 10 years – a figure he described as "amazing".
In his SIMI/ DoneDeal report, Mr Power says older cars are less safe and much heavier on fuel.
As of now, nearly four in five cars (77.8pc) are five years or older, with only 22.2pc registered in the past five years.
The report describes this as "worrying" and adds: "Furthermore, the older the stock, the more difficult it is for an owner to trade up to a new car or a young second-hand car."
It is also costing the Exchequer because the tax take from imported cars is significantly lower than that from new car sales.
It concludes: "The average age of the existing car stock will increase, and imports will become an increasing and permanent part of the car market."
It cites New Zealand as an example where this has happened. Imports now account for about 60pc of the overall car market there.
Numbers employed in the industry stood at 37,400 last year. That is 12,100 down on the 2007 peak of 49,500 but there are signs of 'modest growth'.
Already this year, the number of apprentices is up 6.9pc to 247 and that is 40.3pc higher than the first quarter of 2012. Motor dealers reported 37pc more inquiries in the first quarter, while orders increased by 62pc.