What's the news?
Rather against the run of play, sales of new cars in Ireland rose by 10.8 per cent in April, compared to the same month last year. The figure was somewhat unexpected, given that overall sales for the year so far is down by eight per cent, and used imports continue to rise.
A report by the Society of the Irish Motor Industry (SIMI) shows that while the Irish economy is still positive, both new cars and commercial registrations, declined in the first quarter of 2019 with the exception of both electric cars and used car imports. External threats such as Brexit uncertainty, greater consumer caution and the ongoing growth of used imports continue to undermining new car sales. Another contributing factor is the increase in the VRT on new cars, arising from the fact that no allowance was made by the Irish authorities for the first step in the move to the new WLTP testing regime.
Brian Cooke Director General, SIMI commented: "This rise in new car registrations for the month of April is in reality a timing issue. Easter is a key period for car-hire business and with it falling later than usual in 2019, this pushed some car-hire that normally occurs in March into April. The real indication of the new car market environment is the year to date figures, which show a nearly 11 per cent decrease on last year. The outlook for the remainder of the year is still very uncertain for the Industry. Looking forward to 2020, with the next phase of the WLTP testing due for implementation, it is vital for the Industry that any changes to taxation systems are flagged well in advance of their implementation date to allow the Industry plan their businesses in a normal and effective manner".
Jim Power, Economist and author of the SIMI Report said: "It is still a challenging environment for consumer-facing businesses as the personal sector is pressurised due to a combination of high and rising housing costs, an onerous personal tax burden, subdued wage growth over the past decade, and Brexit is an overhanging dark cloud that is creating major uncertainty and caution in the psychology of consumers and businesses across the economy."
So what's happening? Well, a big chunk of the increase came from Toyota all by itself. Supplies of the new Corolla, which were rather limited at the start of the year, have freed up and so sales have increased by 92 per cent to 2,304 cars for the year so far, compared to 2018. That was good enough to give the Corolla third place in the overall best-selling list (behind the Nissan Qashqai in first place and the Hyundai Tucson in second) and the prize for being the best-selling car in April. Hyundai's Kona also saw a big jump - 1,812 sales so far this year compared to 1,213 in 2018.
Volkswagen is doing well too, taking the overall lead in the best-selling brands list, ahead of Hyundai, Toyota, Ford, and Skoda.
Imports are continuing to climb, though, still driven by the Brexit-affected weakness of Sterling. Used imports climbed by 2.8 per cent in April, compared to April 2018, virtually matching the total number of new cars sold in the month, and they're up by 2.75 per cent for the year so far. With the Brexit farce expected to run on for a while yet, experts are now suggesting that the total number of used imports could hit 101,000 this year, against new car sales predictions of 112,000.
Meanwhile, the move away from diesel continues. New diesel registrations accounted for 48.27 per cent of the market a decline from 56.27 per cent on quarter one last year while petrol accounted for 40.83 per cent of the total up from 37.51 per cent on Q1 of 2018. Average CO2 emissions for new cars sold were 1.5 per cent higher in the first quarter of 2019 when compared to a year earlier. The recent move away from diesel to petrol has resulted in average CO2 emissions now trending upwards again after a prolonged period of decline.