Why are new car sales down

by8auj6csd3ioq · 13-09-2017 12:14pm #1

Why are new car sales down 17%, is it because the value in imports is so good? A friend of mine got a very good deal in an import. Yet they say the economy is improving so one would imagine the new car sales would be better

bazz26 · 13-09-2017 1:25pm

I don't think the economy is as strong as is being portrayed from certain corners. 1 in 10 mortgages are in arrears according to reports yesterday. We have a housing crises and rent is gone crazy. We have a public health system close to failure. We are still borrowing large amounts of money to run the country each day. Yes employment is up but that's not the whole picture.

Regarding car sales down, for the last few years sales have been higher than normal, well that is never going to be sustainable as most of those people who bought in the last year or two are not buying again this year. Brexit and the sterling exchange rate have an impact as they make importing a car more attractive than buying new here.

Stallingrad · 13-09-2017 1:34pm

What bazz says, also the PCP rush over the last couple of years would have sucked up a lot of the new buyers who are now out of the loop for 3 years. The great value across the pond must also be a major factor for private buyers.

bazz26 · 13-09-2017 1:38pm

I'd say you will see another uptake in sales come January when the 2015 PCP deals start maturing and many people roll over to another one.

BillyBobBS · 13-09-2017 1:42pm

Despite what you hear and despite the fact more are working people aren't flush with money. A lot of jobs created are poorly paying and unreliable hours. Also with the pound euro rate there is incredible value to be had in the UK.

13-09-2017 4:01pm

BillyBobBS wrote: »

Despite what you hear and despite the fact more are working people aren't flush with money. A lot of jobs created are poorly paying and unreliable hours. Also with the pound euro rate there is incredible value to be had in the UK.

Also the high rents and USC take quite a whack out of folks wages compared to pre 2007 times.

Folks on €40/€50k annum would be paying €150 ish USC a month and at least the same again more on rent than they would have been 10 years ago.

€300/month is a fair lash out of the pocket.

Cannon_fodder · 13-09-2017 5:22pm

The VRT is a huge factor. I can get a good spec car up North or UK but down here once you add VRT it is huge on some imports, even worst when you look new BMW's sold here. Made my eyes water when I saw €5,500 VRT on a modest 1 Series awhile back.

13-09-2017 5:27pm

The abolition of petrol/diesel vehicles in favour of electric ones could be a factor.

Tow · 13-09-2017 5:39pm

[QUOTE=Augeo;104669066
Folks on €40/€50k annum would be paying €150 ish USC a month and at least the same again more on rent than they would have been 10 years ago.
[/QUOTE]

Over half that USC is the 2% health levy which was included in PRSI before the Income Levy/USC came along. So doing away with USC will not lead to as big an increase in take home pay people expect.

oppenheimer1 · 13-09-2017 5:46pm

The key metric is not new cars, but new registrations, and I believe they are treading water wrt last least. What might have been new car buyers are definitely trading up a class rather than trading up a greater number of years. Falling second hand diesel values in the UK as well as weak sterling is driving this.

In Jan to August 2016 there were 131k new car sales and 38k imports (169k total), in the same period in 2017 there have been 115k new car sales and 58k imports. (173k total).

Also add in the fact that many households held onto a car longer than they expected during the recession, which would have led to a lot of pent up demand once conditions improved. There was an explosion in New car registrations from 2014-2016, which was that pent up demand being released.

Lantus · 13-09-2017 8:43pm

oppenheimer1 wrote:

Also add in the fact that many households held onto a car longer than they expected during the recession, which would have led to a lot of pent up demand once conditions improved. There was an explosion in New car registrations from 2014-2016, which was that pent up demand being released.

Good point. A lot of buyers will of availed of PCP with low interest knowing they will be keeping the car for 7 to 10 years and not rolling into another deal.

The PCP market will stabilise as those buyers re enter in the future. New car sales will decrease but probably won't fall off a cliff. Petrol will increase on diesel for the foreseeable future and manufacturers will manipulate this by increasing diesel car prices by just a thousand or so. With 10cent between the fuels (and likley to drop ) economic pay back on diesel will be unfeasible.

maidhc · 13-09-2017 8:50pm

bazz26 wrote: »

I don't think the economy is as strong as is being portrayed from certain corners. 1 in 10 mortgages are in arrears according to reports yesterday. We have a housing crises and rent is gone crazy. We have a public health system close to failure. We are still borrowing large amounts of money to run the country each day. Yes employment is up but that's not the whole picture.

Regarding car sales down, for the last few years sales have been higher than normal, well that is never going to be sustainable as most of those people who bought in the last year or two are not buying again this year. Brexit and the sterling exchange rate have an impact as they make importing a car more attractive than buying new here.

All true. I certainly don't think the economy is as good as portrayed.

The "national car park" was gone pretty decrepit up to recently, and many who bought would have traded in mid 00s cars and are done for a while.

thierry14 · 13-09-2017 9:01pm

[Deleted User] wrote: »

The abolition of petrol/diesel vehicles in favour of electric ones could be a factor.

Know a good few waiting it out for electric

Have diesels now and wont be buying them again and going back to petrol makes no sense

Tesla are starting to get some recoginition too, especially younger buyers

road_high · 13-09-2017 10:25pm

Augeo wrote: »

Also the high rents and USC take quite a whack out of folks wages compared to pre 2007 times.

Folks on €40/€50k annum would be paying €150 ish USC a month and at least the same again more on rent than they would have been 10 years ago.

€300/month is a fair lash out of the pocket.

This. Personal taxation is still well above pre recession levels, also many salaries have barely budged since that time. If you're paying hundreds extra per month in taxation that's the difference between meeting new car repayments or not.
Not to mention the massive taxes on the cars themselves.

dil999 · 14-09-2017 1:41pm

Hugh Dead Eyeglasses wrote: »

Why are new car sales down 17%, is it because the value in imports is so good? A friend of mine got a very good deal in an import. Yet they say the economy is improving so one would imagine the new car sales would be better

Not sure where you are getting your figures from. According to the SIMI new Irish car sales are down 10% on the same period in 2016.

http://www.beepbeep.ie/stats?sYear%5B%5D=2017&sYear%5B%5D=2016&sRegType=3&sMonth%5B%5D=&sMonth%5B%5D=&x=54&y=10

They are up 40% and 7.4% for the same periods in 2014 & 2015 respectively

bazz26 · 14-09-2017 1:52pm

dil999 wrote: »

Not sure where you are getting your figures from. According to the SIMI new Irish car sales are down 10% on the same period in 2016.

http://www.beepbeep.ie/stats?sYear%5B%5D=2017&sYear%5B%5D=2016&sRegType=3&sMonth%5B%5D=&sMonth%5B%5D=&x=54&y=10

They are up 40% and 7.4% for the same periods in 2014 & 2015 respectively

From the CSO in this article:
https://www.rte.ie/news/business/2017/0908/903220-cso-car-sales/

I'd probably trust the information from the CSO over the S.I.M.I. who are probably trying to talk down the decline in sales as it doesn't reflect well on the motor industry or their members.

acronym Chilli · 14-09-2017 1:57pm

bazz26 wrote: »

From the CSO in this article:
https://www.rte.ie/news/business/2017/0908/903220-cso-car-sales/

I'd probably trust the information from the CSO over the S.I.M.I. who are probably trying to talk down the decline in sales as it doesn't reflect well on the motor industry or their members.

I'd expect the SIMI to try to talk down the industry. Like the way farmers always tell you what a disaster it is to be a farmer.
All that said, I'd expect better stats from CSO than SIMI

jjpep · 14-09-2017 1:57pm

Might also have to do with more people commuting using alternatives to their car. If cars aren't get as much use, owners might have a harder time justifying a new purchase.

bazz26 · 14-09-2017 2:09pm

jjpep wrote: »

Might also have to do with more people commuting using alternatives to their car. If cars aren't get as much use, owners might have a harder time justifying a new purchase.

A valid point but with the price of property and rent going up again due to demand, more and more people cannot afford to live in big cities like Dublin where they work and can use public transport, so they move to commuter towns and villages where property and rent is cheaper. This means a car becomes a must and more time spent commuting in it.

Phil.x · 14-09-2017 4:14pm

I'd say that cars are just too expensive.

ShadowHearth · 14-09-2017 4:28pm

Bazz pointed out pretty much perfectly.

I see issue not in actual cars, but family and individual budgets.

New cars became a lot more affordable when you get scrapage and very low apr, to the point where you better off buying brand new, then few years older car. Which happened to me.
Problem comes in when individual has to pay up so much more for simple things like rent, bills, tax, insurance etc.
So that 200eu a month extra that goes on all those things is money that wont go to buy brand new car.
Wages in Ireland went just very bad way. Its very well payed jobs for few and the rest minimum or barely above it. The gap between rich and poor starting to go worse each year.

dil999 · 14-09-2017 5:17pm

bazz26 wrote: »

From the CSO in this article:
https://www.rte.ie/news/business/2017/0908/903220-cso-car-sales/

I'd probably trust the information from the CSO over the S.I.M.I. who are probably trying to talk down the decline in sales as it doesn't reflect well on the motor industry or their members.

from the article:
"Today's CSO figures show that in the first eight months of 2017, a total of 116,767 new private cars were licensed, down 10% compared with the same time last year. "

The article shows the same year on year info as the SIMI.
The SIMI would have no reason to print incorrect figures, it would seriously harm their credibility as an organisation to do so. (I have no link to the motor industry by the way)
SIMI and CSO show very similar figures for 2105 & 2016. I think this is just a sensationalist article by RTE.

What is striking is the increase in imports.

acronym Chilli · 14-09-2017 5:35pm

dil999 wrote: »

from the article:
"Today's CSO figures show that in the first eight months of 2017, a total of 116,767 new private cars were licensed, down 10% compared with the same time last year. "

The article shows the same year on year info as the SIMI.
The SIMI would have no reason to print incorrect figures, it would seriously harm their credibility as an organisation to do so. (I have no link to the motor industry by the way)
SIMI and CSO show very similar figures for 2105 & 2016. I think this is just a sensationalist article by RTE.

What is striking is the increase in imports.

10% drop in sales is significant too!

Big Wex fan · 14-09-2017 5:49pm

I've been watching car prices for the last year because my car is on its last legs but just keeps going! All these new cars and imports have driven down the prices of my budget range cars. Great to see. Had gone ridiculous 10 or 12 yr old cars going for crazy money.

dil999 · 14-09-2017 5:53pm

acronym Chilli wrote: »

10% drop in sales is significant too!

Not particularly following a 40% and 7.4% increase for the same periods (Jan-Aug) from 2014 & 2015 respectively

dil999 · 14-09-2017 6:02pm

CSO Figure 2013 to 2016 for new private cars licenced

2013: 71,348
2014: 92,361
2015: 121,110
2016: 141,931

If the total figure ends up being 10% down on 2016 It would be 127,743

The new car industry is fairly healthy! We won't have a queue of main dealers down the dole office for a while yet.

dil999 · 14-09-2017 6:10pm

Big Wex fan wrote: »

I've been watching car prices for the last year because my car is on its last legs but just keeps going! All these new cars and imports have driven down the prices of my budget range cars. Great to see. Had gone ridiculous 10 or 12 yr old cars going for crazy money.

Yes, but when the UK leave the EU and people can't import cheap cars anymore, then the prices will start to go back up. Even the prices on the next sale of those imports will increase.

by8auj6csd3ioq · 14-09-2017 7:46pm

Thanks for all the replies

by8auj6csd3ioq · 14-09-2017 7:54pm

dil999 wrote: »

Hugh Dead Eyeglasses wrote: »

Why are new car sales down 17%, is it because the value in imports is so good? A friend of mine got a very good deal in an import. Yet they say the economy is improving so one would imagine the new car sales would be better

Not sure where you are getting your figures from. According to the SIMI new Irish car sales are down 10% on the same period in 2016.

http://www.beepbeep.ie/stats?sYear%5B%5D=2017&sYear%5B%5D=2016&sRegType=3&sMonth%5B%5D=&sMonth%5B%5D=&x=54&y=10

They are up 40% and 7.4% for the same periods in 2014 & 2015 respectively

it was on the news reecently
https://www.rte.ie/news/business/2017/0908/903220-cso-car-sales/
Was in examiner too but can't find link

TheShow · 14-09-2017 9:05pm

Down to a level that is more sustainable. Unprecedented growth in previous years given the dramatic drop from the recession. Just levelling out now.

acronym Chilli · 15-09-2017 5:45am

dil999 wrote: »

Not particularly following a 40% and 7.4% increase for the same periods (Jan-Aug) from 2014 & 2015 respectively

According to the Irish head of one of the marques, his targets for this year are to increase sales. That's tied back to production plans at the factories. He could still increase sales in a dropping market by growing mkt share but that's tough.

For dealers, drops in new car sales might typically be offset by used car activity, but the move to UK imports has to be biting there.

So of course this scenario isn't apocalyptic, but it will leave some folk with uncomfortable business challenges.

15-09-2017 11:16am

ShadowHearth wrote: »

...............
Wages in Ireland went just very bad way. Its very well payed jobs for few and the rest minimum or barely above it. The gap between rich and poor starting to go worse each year.

In 2014 the median salary for a fulltime worker was €32k gross.
That didn't inlcude self employed etc, just actual PAYE workers.

Not quite as bad as you describe to be fair.

https://www.irishtimes.com/opinion/super-rich-or-super-angry-where-are-you-on-ireland-s-income-pyramid-1.2104861
"If you want to earn a good income, work for a large firm, get an education and join a trade union, for all three boost incomes, according to CSO data."

Why are new car sales down

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