Sunday 24 March 2019

Ford chief outlines how major factors, such as imports, SUVs and new emissions tests, are altering who is buying what

Boom, Brexit and WLTP: Strange mix of change in our pockets

Ford Focus
Ford Focus
Eddie Cunningham

Eddie Cunningham

The economy is booming and there are a lot of new 181-reg and 182-reg cars on the road.

Yet all is not quite as it seems on our motoring front.

The industry and the consumers are facing, and driving, major changes and challenges.

It is only when these are succinctly laid out before you that you realise there is quite a lot of turbulence out there - and likely more to come.

The launch of a new car, in this case the Ford Focus, is usually an occasion of upbeat razzmatazz.

There was that from Ford's Ciarán McMahon as he extolled the family hatch's virtues.

But he drew our attention to and subsequently, prompted by our questions, expanded on several aspects that affect all our pockets.

It was a juncture that, in microcosm, touched on the key areas of change that are, will and may seriously impact on you and I over the coming weeks, months and years.

Here's how it unfolded. New-car registrations are running 2pc below last year - given the boom, we probably should be buying way more.

But a 10pc increase in used imports reflects their perceived value. We'll end up buying 100,000 of them - many instead of a new car - this year.

It is, as Mr McMahon said a "very worrying trend", especially when you realise that, additionally, 10,000 vans will be imported this year.

The irony is that dealers here are importing cars and vans, and selling them against new or newer cars.

When you add cars and vans, you have a total of 125,000 used imports.

Mr McMahon reckoned new-car sales here would be 30,000/40,000 more in their absence: That's around €200m in VRT lost to Revenue.

Next up, the swing to SUVs and crossovers is steadily wiping traditional family saloons and hatches off the face of the forecourts. The Ford boss reckoned supermini sales are down 10pc, small-family cars (such as the Focus) have fallen 20pc and Mondeo-segment motors are 21pc off last year. There's no sign of the flight abating - consumers are voting with their feet.

Meanwhile, compact SUV buying is up 18pc, making it the biggest selling segment. There's more to come. "Are we going to see a day when there will be no saloon family cars left in the country?" Mr McMahon asked. It's not looking too good, he admitted.

Another area where the sands are shifting quickly is the big swing to petrol in the small-family (Focus) sector. Petrol's share is 40pc now, up from 28pc, and could easily hit 55pc next year. Makes sense.

Less easy to make sense of is the fallout of the tougher new WLTP testing system. With new cars it is difficult to extract the core increases due to WLTP's mostly higher emission levels. That's because they can be intermingled with the cost of extra equipment on the new cars.

But Mr McMahon calculated that the combined effect for his brand is 9pc.

Where it is possible to extrapolate, as in the case of the Mondeo 2-litre 150bhp diesel, there has been an increase of €1,000. That's a big hike.

It will be some time before we get a more comprehensive idea of overall impact, but it's looking like an upward price curve for most.

A key factor arising from that is how, in the main, rising prices make it more attractive for people to buy less expensive imports.

However, many of those imports have emissions ratings that are three years old or more and represent a direct contradiction of government targets to reduce harmful emissions. Mr McMahon wants the government to do something but, when asked, was frankly and honestly at a loss to suggest what. At least he didn't fall into the trap of calling for a ban on imports.

Sterling is getting weaker. So he re-iterated the problem: While new-car prices here go up, people can still buy a used import and pay lower VRT as cars tested under the old regime have a massive advantage.

There are no obvious solutions, but it is not a time for knee-jerk responses either.

The government, first, has to acknowledge there is a problem for us all and attempt to realistically ameliorate the excesses and extremes, if possible.

We should be absolutely clear about one thing. There is nothing easy or simple about this, especially with Brexit clouding so many horizons.

Focus facts

  • Price from: €24,900 for 1-litre EcoBoost 125PS petrol 6spd manual; 1.5 diesel 120PS 6spd costs €1,900 more. Trim levels: Zetec, ST-Line, Titanium and Vignale.
  • FordPass Connect technology turns the car into a mobile WiFi hotspot with connectivity for up to 10 devices.
  • They expect to sell 3,500 next year.
  • Wagon version due in December; €1,100 more than 5dr hatch.

Irish Independent

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