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A last-minute dash for pre-registrations has pulled some more palatable figures out of the hat for the Irish car trade in February, but the bald fact is that consumers are staying home. 3,891 new cars were registered on the last day of February as dealers and importers defaulted to desperate measures to prop up their monthly sales targets. The final month's tally shows that sales were down -21 per cent (17,128) compared to the same month in 2016 (21,573). With the total new car registrations for 2017 down -8 per cent (56,110) on the same period last year (61,295).
Light Commercial Vehicles (LCV) have also seen a decrease in February -28 per cent (2,504) when compared to February 2016 (3,457) and are currently down -11 per cent (8,869) year to date. While Heavy Goods Vehicle (HGV) registrations were up +5 per cent for the month of February (271) but remain down -2 per cent (727) on that of the previous year (745).
In what should be one of the busiest car buying periods of the year, in a year when the economy is said to be growing at a stable rate and when people are once again reportedly camping out for new houses, 4,550 fewer people went out and put their money where their tyres are for a new car up to February 27th. January's figures showed that slightly fewer than 1,000 people stayed home compared to 2016, but January's figures were also distorted by a last-day rush of 5,000 new car registrations, many of which will have been importers and dealer pre-registering to bolster their sales tallies. Take that last day out of the equation, and the figures are rather more stark. We cannot say for certain what portion of those two last-day registrations frenzies were pre-registered, but it is beyond a reasonable doubt that many were. Only on the 24th of February did sales exceed 1,000 units, so an-almost 4,000 car registration surge is way outside of normal fluctuations in the market.
Prior to the 28th, of the country's top-selling models, only the Nissan Qashqai, Kia Sportage and Volkswagen Tiguan have shown gains in sales, while only Kia and Mercedes have grown as top ten brands. Everyone else was on the downslope.
What's causing the slide? Imports for a start. To date this year, at the time of writing, the number of used imports, primarily from the UK, has risen by a massive 59.28 per cent, from 9,6777 in 2016 to 15,414 this year. And the cars that are being imported are hitting Irelands' traditionally strong-selling brands right in the motorised solar plexus. The top imported models are the Ford Focus, Volkswagen Golf and Passat, Audi A4 and A6, Toyota Avensis, Hyundai i30, BMW 5 Series, Opel Insignia, and Mercedes-Benz E-Class. Some of those will have been imported by Irish dealers, hungry for good stock, but either way it's an influx of cars from outside the state which is hurting the Irish car trade.
"This will be a big disappointment to the trade who were expecting much smaller decreases this year and, in some quarters, expecting it to be on par with last year" Michael Rochford from car industry watchers Motorcheck.ie told CompleteCar. "There is no doubt that Brexit has had a large impact. The uncertainty created by Brexit will not have helped. Buying a new car is one of the largest purchases most people will make so anything that will put a doubt in the mind of the consumers confidence will have knock on effects. However, probably the most pronounced impact has been due to exchange rates making importing a used car from the UK very attractive again. Imports increased by a factor of 50 per cent in 2016 and this trend is growing in the early months of 2017. A lot of car buyers are opting for a used UK import rather than buying new. Whilst many cars are imported directly by dealers, buyers should still beware as we are seeing an increase in clocked and written off cars being imported to Ireland also."
Colin Sheridan is the sales and marketing director at Gowan Distributors, the importers for Peugeot in Ireland, and he told CompleteCar that: "it's certainly looking like a challenging year ahead. Certainly in these early days we're re-adjusting to a different world, a post-Brexit world. Now, there are good offers out there for buyers, and there's value to be had but this is all evolving pretty fast.
"Ultimately, the fall in sales is a question of confidence, which is for a million different reasons, added to which we had something of a bubble in 2016, a big bounce back from the recession and the post-recession where people held back on purchases until things felt better again. That said, we can't talk these things down because if we do they will inevitably go down. The market saw about 100 per cent growth in five years, which is way ahead of any other European market, so that had to end and it's just too early to say yet whether February will be indicative of a longer term trend."
There is some potential for some brands and dealers to be insulated from a small fall in the market because many buyers are spending more on their cars. Certainly Peugeot is seeing that with most of its recently-launched models, including the new 3008, buyers are pushing ever higher up the spec ladder, increasing the potential for profit for both importers and dealers. Caution is being urged though by some - whereas it's generally assumed that the motor industry, as a whole, works on a profit margin of around eight per cent, more than a few eyebrows have been raised recently at the mention of that figure, suggesting anecdotally if in no other way, that the real figure is significantly lower for many.
Commenting on the figures Alan Nolan SIMI Director General said: "We have been anticipating lower numbers in February compared to 2016, with Brexit continuing to impact on used vehicle imports, with fewer working days this year and with less hire-drive cars because of a later Easter but these numbers are somewhat poorer than we had hoped.
The Industry projections for the year suggest a market close to 140,000 for 2017, compared to 147,000 last year, but as Economist Jim Power stated previously, "predicting the new car market for this year is going to be far more difficult than usual. Even with the relatively poor market in February, the Year-to-Date figure remains just 8 per cent below last year so attention will now turn to the final month of the First Quarter. As a result the market for March will be very closely watched by the Industry for a clearer indication of where the 171 registration period is likely to finish up. While the economic indicators for Ireland are extremely strong, the ESRI have recently noted a fall in consumer confidence in December followed by an increase in January, although still behind 2016. The Motor Industry can act as a very accurate barometer for the Economy and consumer confidence so such volatility in consumer sentiment tends to be reflected in the vehicle registration statistics."
The ten-day numbers for March, will tell a significant story. If March's figures are similarly depressed as the year so far, then alarm bells will begin ringing. With political in-fighting in the government, the prospect of a general election, the potential for a new property price bubble, Britain's headlong charge towards Brexit catastrophe and the next excitingly terrifying chapters in the tale of Trump, Irish car buyers may well continue to hide behind the nearest rock, rather than venture into a dealership this year.