Statistics reveal, 13,381 cars have been imported from the UK so far this year, a rise of some 41%. The decision by 52% of the UK to leave the EU has had a huge impact on the Irish economy, not least the car market. Many people are moving away from buying new cars because of uncertainty about the economic impact of Brexit. However, those that are buying cars are flocking to the UK to avail of the drop in Sterling to buy second-hand cars.
By the end of the year, some motor industry experts are predicting that 90,000 vehicles will be brought into Ireland the majority from Britain and Northern Ireland, this compares to 72,000 last year. In the first three months of this year alone there were 24,000 imports, an increase of 56% over the first three months of last year.
The industry is coming off 3 years of sustained annual growth with 30% year-on-year increases becoming commonplace. The dip in sales is largely down to uncertainty in the economy caused by Brexit, whilst the strength of the Euro against Sterling has made it very attractive to import used vehicles from the UK and consequently many people are opting for a nearly new import rather than a brand-new vehicle.
The latest official sales figures show car registrations for Q1 2017 decreased 8.3% against Q1 2016, while March 2017 sales were 7.5% down on March 2016.
Does it boil down to Sterling V’s Euro?
The attraction of UK cars has always been that buyers can avail of lower prices and tax rates so even when vehicle registration tax is taken into consideration cars can be bought at a much lower cost. However, in the long term bringing a car in from a Non-EU Country will not afford the same benefits so this may actually turn out to be positive for the Irish car market.
The car trade in Ireland will be hoping for a significant boost from the ‘172’ registration plate change, as sales of new models dipped considerably in June. Figures released by the Society of the Irish Motor Industry show that 91,189 new cars have been sold, a drop, compared to 2016, of 10%, while sales in June were down by 14% compared to the same month last year.
Those figures are set against the background of increasing imports of cars from the UK, which continue to be driven by a weakened Sterling exchange rate.
Commercial sales decreasing, is this a sign of the times ahead?
Commercial vehicle sales have slipped, which is possibly a larger worry for the wider economy with van sales down by 14% for the year as a whole. There has also been a noticeable series of spikes in last-day registrations in the first four months of the year, indicating that a high proportion of the cars sold were being pre-registered to boost dealers’ and importers’ sales figures, although May and June showed a distinct reduction in such practices.
The first half of the year has seen a decline in registrations in all sectors. As the Industry’s now turns it focus to the ‘172’ registration period which commenced on the 1st of July, it is anticipated that sales in the second half of the year should keep the car industry on track to reach the 132,000 total that was predicted at the start of the year.
The motor industry continues to be a strong contributor to employment, with 40,800 people employed throughout Ireland. However, one must consider now that many professional service firms are moving to Ireland due to Brexit, it cannot be all give and no take, something will have to give, in this case it appears to be car sales.