January puts the brakes on new car sales in Cork
Car sales in County Cork have fallen sharply in the first month of the year, mirroring a national decline that is being blamed on increased imports of second hand cars from Britain.
According to a report compiled by the Society of the Irish Motor Industry/Done Deal, 5,065 new cars were registered in Cork last month. This compares to 5,420 registrations in January 2017, representing a decrease of 6.55%.
Nationally, 181 registrations are down by 4.8% (37,125) compared to January 2017 (39,003). However, sales of light commercials vehicles have risen by 6.3% (6,728) compared to January last year (6,329), while HGV (Heavy Goods Vehicle) registrations are down-11.84% (402) in comparison to January 2017 (456).
The SIMI/DoneDeal Report highlights a number of price decreases in the cost of motoring. The average price of a new car in 2017 was 2% lower than a year earlier, while the cost of motor insurance in December 2017 was 10.9% lower than it was a year earlier. However, the cost of fuel has increased, with petrol prices up 4.2% and diesel prices up 3.6% over the past year.
The report also shows Ireland's strong economic performance last year but despite high levels of consumer confidence, the Motor Industry faced a significant and uncertain year with monthly declines in new car registration figures, reflecting the substantial impact of Brexit.
Used car imports increased by 29.5% in 2017 aided by the weakness in sterling and this also impacted on new car sales by dampening the residual value of Irish used cars, and therefore increasing the cost of trading in an used car for a new model.
Jim Power, economist and author of the SIMI/DoneDeal report, commented: "In normal circumstances, the positive economic backdrop would be expected to deliver growth of up to 10% in the new car market in 2018. However, the distortionary impact of sterling weakness and the associated surge in used imports from the UK will in all likelihood more than offset the positive economics."
For 2018, the used import market is projected to grow by 20% to reach 114,950. New car registrations in 2018 are forecast at 118,220, which would represent a decline of 10% on the 2017 outturn.
SIMI Director General Alan Nolan added that "2017 finished down 10.4%, as anticipated, and also recorded a shift in the market-share of diesel cars from 70% to 65%. The same trends have been apparent in January's new car sales, which have delivered a steady start to the 181 registration period, but Brexit has continued to impact with new car sales down 4.8% while used car import registrations are up 20% compared to January last year.
Diesel continues to be the choice of engine for over half of Irish new car buyers but the noticeable trend towards petrol and hybrid vehicles which started last year has continued in 2018.