What's the news?
Sales of new cars continued to climb in April, with a ten per cent increase over the same period last year, but the total market rise year to date has slowed somewhat, from well above 30 per cent earlier in the year, to 26 per cent above 2015's figures now.
Nonetheless, the Society of the Irish Motor Industry (SIMI) has hailed the latest figures as a continued sign of economic recovery. SIMI Director General, Alan Nolan said: "Vehicle registrations are a very accurate barometer for the progress of the economy with the new car statistics reflecting the position of consumers while business activity and confidence can be seen in the commercial vehicle sales. Registrations from the different sectors continue to perform well, as we progress towards more normal levels of sales for our Industry. The two registration plate system has produced two very strong sales peaks in the first and third quarter of the year. As we move closer towards the second registration period we would expect to see sales taper off somewhat however there are still very strong offers and many deals still to be done."
So far 93,240 new cars have been sold this year, according to SIMI's figures. There have also been 15,730 vans sold, and 1,380 heavy trucks.
The Hyundai Tuscon has continued its domination of the new car sales charts, holding on to the top-selling spot for the fifth month in a row, ahead of the Volkswagen Golf, Ford Focus, Skoda Octavia and Nissan Qashqai. The top selling brands so far for the year are Toyota, Hyundai, Volkswagen (which has moved up from a fourth-place position earlier in the year - clearly the diesel emissions scandal has had little long-term effect on the Irish consumer psyche), Ford and Nissan.
However, the new sales boom is not, necessarily, as good a news story as it may first appear. For the past half-decade, slow new car sales have kept second hand prices buoyant, which has helped dealers when it comes to arranging PCP finance based on future residual values. The rise in new sales has the potential to puncture that balloon. Michael Rochford Managing Director of Motorcheck.ie said: "the continuing rise in new car sales is great news for the motor trade and the economy in general. But we should be aware that prices in the used car market have risen in recent years due to the stock shortages created by the downturn. This has kept residual values high and made finance deals such as PCP more affordable. But the growth of PCP means a glut of relatively young used cars will hit the market when those three-year deals expire.
"It is very likely that the used car market will begin to see values start to slide over the coming years as a result of supply pressures being eased" he continued. "The effects of this could be felt by the consumer as well as the car manufacturer or banks, and the consequence for the consumer is that their next PCP may not be as affordable due to reduced residual values whereas the manufacturers and banks they may end up taking a hit on disposal prices if they don't price their books accordingly now".