Significant rise in new car sales this year

Sunday Business Post - Summer Motoring Supplement - June 24 2007

Sales of new passenger cars in Ireland have risen significantly in the first few months of the year. According to figures released by the Society of the Irish Motor Industry (Simi), a total of 138,212 were sold in Ireland to the end of May. The corresponding figure for 2006 was 129,222.

"New car sales are up by about 7 per cent overall so far this year," said Cyril McHugh, chief executive of the SIMI. "It is a very good year and it looks like 2007 is going to the be second biggest year ever for new car sales in Ireland after 2000, which was an exceptional year."

McHugh predicted that the total new car sales in 2007 would be in the region of 190,000 - up from 178,826 last year.

"Our population is growing, and this growth is in the adult age group, more than in new births," said McHugh. "The increasing numbers of people at work creates a demand for cars."

The monthly sales figures for May showed even higher year on year growth. McHugh said that the culmination of the Irish government’s SSIA (Special Savings Incentive Accounts) was a factor in this.

"With May being up 14 per cent that is evidence of an SSIA impact, either with the lump sum themselves, or with the now free monthly payments," he said.



Dave Shannon, managing director of Toyota Ireland, said that the boost in spending power created by the SSIAs meant that some motorists could now opt for a more expensive model than they might otherwise have done.

"SSIAs are being used by people to upgrade, rather than new people coming in to buy new cars,” he said. “We are finding that people want to go up a grade to get air conditioning or alloy wheels, rather than get the basic model."

The Simi statistics show that Toyota remains the largest new car brand in Ireland, with Volkswagen succeeding Ford in second place. Toyota sales to end of May 2007 were 20,763, representing a 15 per cent market share. Volkswagen sales totalled 15,731 and Ford managed 15,179 sales, representing a 11 per cent of the market in both cases.

"There is still good demand out there for new vehicles, and within Ford, our passenger volume is up by over three per cent so we are sharing in the industry growth," said Eddie Murphy, chairman of Ford Ireland.

Other leading brands in the Irish new passenger vehicle sales market include Opel (12,186 sales to May 2007), Nissan (10,743), Peugeot (5,743), Renault (5,310), BMW (5,158) and Hyundai (5,158).

According to the European Automobile Manufacturers Association (ACEA) statistics, the total new passenger car registrations in the EU and Efta (European Free Trade Area) fell for a fourth consecutive month in May 2007 with a total of 1,442,518 registrations, down 1.6 per cent on May 2006.

"Our car ownership level is still towards the lower end of the European Union average, with about 39 cars per 100 people, whereas England, France, Italy and Germany are all at 50 or above," said McHugh.

Shannon said that the segment within the new car market in Ireland showing the highest growth was the C-segment.

"This segment, which is the Toyota Corolla and Ford Focus segment, has gone up from 41,000 to 45,000 from January to May," he said.

Murphy said broader economic factors would influence the numbers of new cars sold in Ireland next year.

"Clearly if interest rates continue to rise, that will have an impact on new car sales, to an extent," said Murphy.

Shannon said that changes in the Irish political situation could also affect new car sales going forward. He said there would be a slight fall in the total number of new cars sold in Ireland next year.

"Even allowing for the new government, and the introduction of a new VRT (Vehicle Registration Tax) system, I do not think there will be a huge effect on the volume of sales in the country,” he said. “But if you ask me I would say new car sales might be somewhere around 10 per cent down in 2008."