Tuesday 23 July 2019

Why ban on used imports could hit you in the pocket

Used car imports
Used car imports
Eddie Cunningham

Eddie Cunningham

The whole area of used UK imports is swamped in 'ifs' and 'buts' and points made by a motoring expert this week highlight just how uncertain and volatile an area it has, and could, become.

That is especially true if the government was to, in some way, manage to impose a ban on particular imports.

It is now claimed the repercussions of such a move could end up hurting individual motorists in the pocket as it could reduce choice and competition.

A large proportion of current used imports are brought in by dealers, as Motorcheck.ie chief Michael Rochford points out in his analysis.

They are doing so to stock their forecourts with good, fresh used cars at lower prices, he says.

He goes on to outline two key elements of the situation as it now stands - and their potential implications.

He does so as new-car sales are trailing 12pc behind January 2018, while used imports are more or less at the same level as this time last year. (That could mean a narrow gap between new-car and used-import figures before the end of 2019.)

On banning certain volumes of imports, Mr Rochford asks: "Would the sales of new cars be enough to supply the used car market?"

He reckons it is unlikely on the basis that six times as many used cars are bought compared with new-vehicle purchases.

It is important to be clear on this, however.

Not all used cars would be prime import substitutes because there would be used trade-ins against used trade-ins and some cars going 'to the trade' etc.

But emphasising the point, Mr Rochford says: "Curtailing used-car imports from the UK could actually cause some supply issues."

He warns: "This would result in a reduction in choice and second-hand prices would harden and skew upwards."

As I said, it is an area of extreme volatility and blurred lines wherein decisions and trends can have widespread ramifications.

Mr Rochford also believes a move to ban used UK imports could be challenged under consumer or anti-trust law. "While the government might clothe such a ban in environmental terms, it's equally likely that it could be slapped down as an effective subsidy to the car trade here, not to mention the fact that it would dramatically reduce consumer choice."

The Department of Finance recently told the Irish Independent (Mon, Jan 14) that anything to do with addressing the imports issue would be part of new policies to ensure Exchequer returns from motoring are protected as increasing numbers of lower-tax electric cars are bought.

Parallel with that, one set of figures emerged from a brief talk I had with Nissan CEO James McCarthy - an avid advocate of a selective used-import ban.

He reminded us how the average four-year-old car emits 4.3 tonnes of C02 a year. A new car, the current Nissan Qashqai 1.5 diesel was given as an example, emits 25pc fewer CO2s than its 2015 counterpart.

And that 25pc drop means upwards of 1.1 tonne fewer harmful emissions each year.

Indo Motoring

Also in Life