The motor industry suffered very badly during the recession but has since been recovering year on year. Once the economy started to pick up, sales of commercial vehicles started to pick up followed by car sales. 2014 showed an increase of 51% in commercial vehicles and a 30% increase in new car sales on 2013 figures.
The recovery has continued since and in the first half of this year new car sales are running at 23% higher than the same period last year. So far 122,800 new cars have been sold and this is expected to rise to 152,000 by the end of the year. New van sales are up by 25% and HGV sales are up by 30%.
New car registrations in Wexford are ahead of the average with 2501 in the first 6 months of 2016, an increase of 29.2%. Roscommon recorded the strongest annual growth rate of 37.9%, while Leitrim recorded the lowest growth rate at 14.5%.
According to the SIMI and Done Deal the car market is once again healthy and has returned almost €1bn to the national exchequer in the 2nd quarter of the year.
Meanwhile, a recent poll conducted on behalf of Done Deal shows that 41% of Irish people intend to buy a car in the next 12 months. The anticipated average spend on a car is €11,394 with those buying new cars expecting to splash out an average of €19,726 and the average cost of a used to car is expected to be €7,645.
When it comes to choosing a new car, the make/brand is the most important consideration (23%) closely followed by price (19%). Colour was least important (4%) while emissions came in second last at (5%), a little surprising in these days of supposed environmental awareness.
While the massive rise in expected sales is good news for the industry it also illustrates what is happening in the general economy.
Car sales reflect the economy
For instance over half of the people intending to buy a car, plan to do so out of savings, indicating that quite a lot of people have been able to save for large purchases.
Over a quarter of people intend to take out a credit union loan. PCP finance is also popular with 11% intending to use this as part of their financing for their new car.
For the people surveyed who did not intend changing their car, access to finance was given as the greatest obstacle, especially among the 35 to 54 age group, indicating that many in this age group are still struggling with debt, negative equity and taxation issues.
Cars are not the only large purchases on the increase. Other recent polls showed that 75% of people intend to make large purchases next year with holidays topping the poll and home improvements also popular. Many are opting to extend rather than move given problems with negative equity and housing shortages.
The increase in commercial vehicles sales shows increased business investment and confidence.
Future trends
The motor industry has made great strides over the last couple of years but is still not quite back to what it should be. How long the current growth level can be maintained is in doubt. As the market approaches its natural level growth would be expected to slow somewhat.
Despite all the optimism and the numbers of people intending to change their cars in 2017 some experts fear that overall the growth in car sales could actually be flat in 2017.
July showed a slowing in new car sales and registrations in the first month of 162 were well below those of January, perhaps because so many people had already bought new cars but also maybe because of uncertainty and general unease surrounding Brexit.
Consumer sentiment generally has been somewhat shaken by people not knowing how Brexit may affect them, so some people and businesses may be reluctant to splash out until they see how things go.
Used imports also rose since 2015 having been in decline since 2008 and if sterling remains low or weakens further this sector could show even further growth. In the first six months of 2016, 32,285 used cars were imported (24.2% of total cars registered), which was 27.7% ahead of the first half of 2015.
Cost of motoring
The cost of motoring has generally gone down this year. The price of a new car has fallen by 25% since 2008 and 3% since last year.
Petrol has gone down 8.4% and diesel by 12.4% over the year.
But a major issue preoccupying motorists these days is of course the spiralling cost of insurance. On average insurance premiums have risen by 38% since last year and a staggering 71% since 2013, especially affecting young people and those driving older cars. The cost of insurance nowadays may well be the determining factor as to whether some people can afford to run a car or not. Also there is increased danger of irresponsible people buying a car anyway and driving without insurance.
The SIMI and indeed many consumers believe the time has come for the government to look into what is happening in the insurance industry and see what can be done to ease the pressure on motorists.
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