THE SIMI/DONEDEAL Motor Industry Review is an economic review of the Irish motor industry. The latest review covers Q2 of 2016, from April to June inclusive.
SIMI (Society of the Irish Motor Industry), the national representative body and official voice of the motor industry in Ireland, in association with DoneDeal, Ireland’s largest and most successful online motor sales website, commissioned economist Jim Power to conduct this quarterly review of the Irish motor industry. Jim Power is owner-manager of Jim Power Economics Limited, an economic consultancy firm.
The review shows that the Irish motor industry has continued to perform strongly in the first half of 2016, although there has been some deceleration as the year has progressed.
In the first six months of the year, total new car registrations reached 101,335, which is 23.1% higher than the first half of 2015.
The review also shows that in general, the cost of motoring has decreased with the average price of a new car 3% lower than a year earlier. Since 2008, the average price of a new car has declined by 25%. The price of petrol decreased by 8.4% and the price of diesel decreased by 12.4% compared to a year earlier. However, in contrast, the cost of motor insurance in June 2016 was 38.6% higher than a year earlier and has increased by 71.3% since June 2013.
Speaking about this, Alan Greene SIMI President, said:
The soaring cost of insurance, especially for young people or for those driving older cars is a serious concern. We believe it’s time for the Government to establish a strong review of the causes of the current high cost of insurance, similar to the Motor Insurance Advisory board that successfully achieved significant insurance cost reductions during the late 1990s.
The review shows that all counties recorded strong growth in car sales in the first half of 2016. Roscommon recorded the strongest annual growth rate of 37.9%, while Leitrim recorded the lowest growth rate at 14.5%. Dublin accounted for 38.3% of the market, which is down from a market share of almost 39.12% in the first half of 2015.
Commercial vehicle sales expanded strongly in the first half, reflecting improved business investment spending. Sales of Light Commercial Vehicles increased by 25.6% to reach 18,409 and sales of Heavy Commercial Vehicles increased by 42% to reach 1,789.
The review also looks at used imports and shows that the growth rate in used imports has increased progressively during the year. The weakness of sterling has made imports more attractive, and if sterling remains at current levels or weakens further, imports from the UK could become an even more significant part of the market.
Used imports peaked at 63,559 in 2008 and have subsequently trended in a downward direction. In 2015, 47,798 used cars were imported into the country, these accounted for 47% of total car registrations, which represented a decline of almost 11% on the previous year, and is almost 25% below the peak in 2008. In the first six months of 2016, 32,285 used cars were imported (24.2% of total cars registered), which was 27.7% ahead of the first half of 2015.
Commenting on the review, Cathal Cremen, Commercial Manager of DoneDeal’s motor section, said:
It is great to see the motor industry achieving growth in H1 2016. At DoneDeal we are seeing identical growth trends. We now estimate that over 72% of all dealerships’ stock, eight years old or younger, are being advertised on DoneDeal’s car section.
In the first six months of 2016, there were 513,296 motor advertisements carried on the DoneDeal website, which was 7.9% ahead of the first half of 2015. Of this total, cars accounted for 343,658 advertisements, which was 9.3% ahead of 2015; and 169,938 advertisements were carried for motor-excluding cars, which was 5.3% ahead of 2015.
Regarding the economy and Exchequer, the review shows that in the first half of 2016, the total tax take from new car sales was €881.8 million, which was 28.7% ahead of the first half of 2015. The total tax take from used car sales was €96.6 million, which was 26.4% ahead of the first half of 2015. In total, the Exchequer collected €978.4 million in VRT and VAT receipts from new and used car sales in the first half of 2016, which is 28.5% higher than the first half of 2015.
Overall, although there has been some deceleration as the year has progressed, the economic outlook is still positive with total car sales forecast to reach 152,000 by the end of the year.
Looking towards next year Jim Power, the author of the report, said:
Despite the still-positive economic outlook, growth in car sales could be low or maybe even flat in 2017. This slowdown in growth reflects a market approaching, but still lower, than its natural state, after a prolonged period of catch up, but one that is now shrouded in Brexit uncertainty.
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