What's the news?
Figures for the month of May show that the market for new cars in Ireland is still powering ahead, the 6,940 new sales in May means an 11 per cent increase compared to the same month last year. The cumulative total for the year is now 80,913 - a rise of 26 per cent on last year. That means more cars have been sold in the first five months of this year than in the entire year of 2009.
Commercial vehicles are also doing well. LCVs (Light Commercial Vehicles - vans to you and me) were up by 35 per cent for the month and 56 per cent for the year, while HGVs (big trucks...) were up 38 per cent in May.
Commenting on the figurers SIMI Deputy Director General Brian Cooke said: "We are fast approaching the half way mark of 2015, with confidence continuing to grow in the economy generally and among SIMI members regarding the business outlook in the months ahead.
"This confidence is reflected in the creation of new jobs within the Industry. Recent figures released from the CSO confirm that employment in our Industry is in steady recovery mode and has seen a rise of 2,800 jobs in the first quarter of 2015 (Q4 2014 41,900). Employment within the Motor Industry is currently estimated at 44,700. While sales in new and used vehicles, both cars and commercials, are continuing to show strong growth, the Aftermarket and Repair Sectors are experiencing much more modest improvement. The reality is that even with the rise in new vehicle sales the age profile of the national vehicle fleet is going to improve only slowly over the coming years and this directly impacts on business in these sectors."
It's not all rosy in the garden though. The used market is still straining to keep up with supply, and buyers are finding that there's not the sort of choice on the forecourts or in the classifieds as there should be. Used imports, which originate mainly from the UK (GB and Northern Ireland), continue to slide with exchange rates remaining unfavourable. Registrations resulting from used cars imports were down over 27 per cent in May and down 12.6 per cent year to date. This trend continues to compound the stock shortage in the used car market as demand still far exceeds supply in this sector of the market used car prices remain high and bargains are hard to find.
Commenting on the figures, Michael Rochford, Managing Director of Motorcheck.ie said: "It's great to see new vehicle sales in both the private sector and the commercial sector continue to rise. However stock shortages in the used car sector is a worrying trend and is resulting in not much choice and value in this sector for the used car buyer. When this happens people feel under pressure to complete sales so we would urge buyers to keep ensure they perform a thorough check before parting with their hard earned cash."
There are other concerns. Recent research by Barclay's Bank has found that, in the German car market, pre-registrations (the practice of a car company selling cars to itself or its dealers, which are then sold on as 'demo models' at a hefty discount) are running at historic highs. A full 31 per cent of new car sales in Germany this year have been pre-registered cars, with some brands pushing that figure to 49 per cent of their sales. No official figures exist for pre-reging in Ireland and almost all brands vehemently deny that they indulge in the practice. The German figures should at the very least sound a warning though.
There are also concerns being raised about the level of discounting in the market. Across Europe, the average discount from list price for a new car is running at about one fifth, a figure that the industry is finding it hard to sustain. While there are welcome discounts and 'scrappage' deals available as we head towards the 152-plate, and the average car buyer can grab themselves something of a bargain, it remains to be seen for just how long car makers can undercut their own prices.