Irish car dealers hope to keep rolling out good news in 2016
Sum up 2015 for us?
It is turning out to be a good year for the motor industry with the latest registration statistics produced by the Society of the Irish Motor Industry reporting new car registrations at the end of October up 30% (123,670) on the same period last year.
Light commercial vehicles are also up 43% (22,848) and heavy goods vehicle registrations are showing a 6% increase.
The first 10 months of the 2015 has seen new registrations totalling 123,670 representing the strongest year since 2008 (151,444) for new car registrations, the last year when sales were at economically sustainable levels.
The 152 plate has had a very significant impact on car sales in the third quarter of the year with registrations representing in excess of 34% of the yearās new car registrations compared to just less than 32% last year.
The growth in car sales is making a significant contribution to employment, with motor industry employment now standing at 44,700, including an additional 5,600 jobs (CSO Q2) that have been created this year.
Every county continues to experience strong growth in new car sales, ranging from Leitrim with the strongest growth of 42% to Wexford with the lowest growth rate of 16%.
The motor industry is a key contributor to the exchequer with over ā¬1bn from new and used car sales alone so far this year.
What can we expect in 2016?
The outlook for the industry in 2016 is a positive one, with economic indicators likely to improve again in 2016.
Consumer confidence is at a nine-year high, and allied to increased employment and personal tax reductions, along with increased availability of finance for consumers, bodes well for all retail sectors including the motor industry.
Vehicle sales, new and used, cars and commercials, will continue to grow next year. According to the latest SIMI/DoneDeal Quarter 3 Motor Industry Review, new car sales in 2016 look set to grow by at least 20% on 2015, which would translate into total sales of at least 150,000 translating into an extra 3,250 jobs in the sector; and increased Vat and VRT revenues of ā¬208m for the exchequer.
For the industry, the key will be to maintain, as a minimum, this level of new car sales annually into the future. While we have seen growth in recent years this is on the back of six years of depressed activity, so two or three good years wonāt make up for this. If sales activity can maintained near or above this level in future years, we will finally be able to say the industry has returned to long-term sustainability.
Positive signs also in the commercial sector?
Light commercial vehicle sales have also seen strong growth over the last two years, and we expect further improvement in 2016 and beyond. Sales of vans are a barometer as to how the SME sector is recovering, and this increase in commercial vehicle sales is mirrored in other statistics such as corporation tax returns and strong employment growth, which clearly indicate business performance and confidence are improving.
While the heavy goods vehicle registrations have shown more modest growth, it is hoped that the new heavy goods commercial road tax regime which comes into force next year, will see more sustained growth in this sector next year.
The recent VW scandal has again raised questions of transparency in the motor industry. Are regulations in Europe tight enough and what can be done to assure consumers?
While not commenting on any individual brand issue, the motor industry in Europe is heavily regulated and policed already on issues such as emissions and road safety, and there a further tougher emission based regulations coming down the line.
Customers should be assured that regulations in Europe and Ireland in relation to the motor industry are robustly regulated by the relevant authorities.
Every time a scandal or recall is uncovered, the motor industry is dragged kicking and screaming into the light. Is there enough accountability and who is there to protect the rights of the consumer?
I wouldnāt necessarily agree with the statement included in this question. Ireland, like other EU countries has a very strong recall system, and vehicle manufacturers are always ready to rectify any recall issues as they arise. Ireland has consumer legislation, which includes clear remedies, that protects consumers, in the event they are unhappy with a product or a service.
Consumers can also get advice from the Consumers Association of Ireland and from the Competition and Consumer Protection Commission. In addition, customers of SIMI members can avail of our free investigation and complaints service, which aims to mediate on disputes between customers and garage.
Is the clock running out for diesel engines and what does this mean for Irish motorists, given the volumes sold here?
The future of diesel passenger cars is going to be impacted with the tougher emission targets from the EU and the move towards real driving emissions testing. This means that new diesel cars will have to continue to improve on their CO2 and NOX outputs in the years ahead.
Certainly over next decade, diesel will continue to play an important role in Ireland and EU car markets. We have seen a slight move towards petrol in the last couple of years, with consumers who do lower mileage and/or mostly urban driving benefitting from the improved CO2 profile of petrol cars and we would expect this trend to continue, as well as more electric and plug-in hybrid vehicles being sold. Diesel sales account for 71% of the cars sold in Ireland so far this year.
With the increase in the new car market anticipated for next year, we may well see more diesel cars numerically, but we would expect to see some reduction in the diesel percentage share of the new car market in 2016.
However, diesels will still account for the majority of new car sales for the next few years.
Is there enough Government support for electric cars?
In terms of financial incentives for electric vehicles, all stakeholders are playing their part including the Government. Generous SEAI grants and VRT incentives are currently available for electric vehicles, and we would hope they would be extended beyond 2016.
We would also support, in addition to the current grants and VRT incentives, āsoftā incentives such as access for EVs to restricted city locations, reduced parking fees and tolls and the right to use bus lanes.
These have worked in other countries, leading to greater penetration of electric vehicles, and could be hugely effective in Ireland also.
Is the industry concerned about rising insurance costs?
While the economic indicators for the motor industry for 2016 are mostly positive, one area of serious concern for our members and their customers is the rising cost of motor insurance over the last two years. In particular, this impacts more seriously on the less well-off and/or young drivers. This issue is a complex one however, and there is no simple answer to this problem.
The last time premiums rose rapidly led to the establishment of the Motor Insurance Advisory Board (MIAB), and the measures implemented following their report saw a significant reduction in motor insurance premiums, benefitting both the insurance industry and their customers.
We believe that a similar review of the issues impacting on insurance costs today is vital if we are to avoid some of the problems that were experienced as a result of very high motor insurance costs in the past.
For both car owners and the insurance industry, such an objective review of the real issues that are causing the steeply rising costs into the future should be very welcome and indeed reassuring. The society feels that therefore that the MIAB should be re-instituted to carry out a thorough review.
