Brexit set to hit Irish motor industry growth

Brexit may put a halt to the recent strong growth in the motor industry, with new car sales expected to fall this year.

Brexit set to hit Irish motor industry growth

After a bumper year in 2016 for the motor trade, the outlook for this year is far more uncertain.

New car sales for January were down 1.7% to 39,019 when compared to the first month of 2016.

Light commercial vehicles are down 2.4% (6,394) compared to January last year (6,555), while heavy goods vehicle (HGV) registrations dropped 6.3% (456) for the same period (487).

The figures were presented by the Society of the Irish Motor Industry and DoneDeal in a quarterly motor industry review.

Their report highlighted the strong economic performance of the industry last year, pointing out that there was growth in registration figures across all counties.

The motor industry had generated strong returns for the exchequer with a total VRT and Vat take of €1.5bn from new and used car sales alone, an increase of 26.8% on 2015.

However, economist Jim Power, the report’s author, said Brexit and an expected increase in imported cars would hit car sales for 2017.

The report predicts a fall of around 3% in the number of new cars to be sold here this year.

“Looking to 2017, while the outlook for car sales is a bit more difficult to predict than last year, the projected growth in personal disposable incomes and the availability of credit provide solid support for car sales,” said Mr Power.

“However, the impact of Brexit and the increased volume in imported used cars are other issues that may impact on new car sales this year.

“Overall, though, numbers should be fairly close to last year with perhaps a slight decline of around 3% in new car sales in 2017 which would imply new car sales of around 142,000.”

The report examines the cost of motoring in 2016.

It found that both petrol (+1.9%) and diesel prices (+3.2%) had been higher than in 2015, while the average price of a new car had declined by 5.5%.

Motor insurance costs since 2013 have increased by 61.5%, notes the report.

Despite a slight decrease in the last quarter of 2016 by 5.5%, insurance costs in December still ran at 8.9% higher than a year earlier.

Alan Greene, the president of the Society of the Irish Motor Industry, said that, despite a more cautious outlook for 2017, the motor industry remains a major contributor to the economy.

“The motor industry continues to be a strong contributor to employment, with 40,800 people employed throughout Ireland,” he said.

“Last year our industry contributed €1.5bn to the exchequer in car sales alone. This year was always going to be a more cautious year for businesses, right across the economy, but we have seen a steady start in January and hopefully we are on track for another good year and continuation of a stable market during the rest of the year.”

Car preferences

Almost two thirds of Irish drivers fear driverless cars while Irish motorists love Audi’s but think Nissans are ugly.

According to a survey of almost 4,000 drivers by insurance company, Audi is the most desired car brand in the country if money was no option followed by BMW and Mercedes.

One in 10 drivers would choose a Land Rover over all else while 7.5% would go for a James Bond-style Aston Martin.

Renault was chosen as the most disliked of the leading car brands sold in Ireland, with 26% of drivers saying that it is the car they would least consider.

Kia (12%) and Seat (12%) were joint second.

Toyota (3%), Hyundai (4%), Ford (4%) and VW (4%) were all brands that consumers find attractive and are among the biggest selling cars in the country.

When asked about the top-selling brands they would be least likely to buy, respondents referenced Renault’s poor reputation, Seat and Kia’s bad resale value, and the supposed ugliness of Nissan models.

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