Buying new cars: The mood is very cautious

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Buying new cars: The mood is very cautious

Cars, cars, cars

The Society of the Irish Motor Industry (SIMI) issued the quarter two Motor Industry Review of 2017 in association with DoneDeal, along with the SIMI official 172 registration statistics.

The review outlined that new car sales in the first half of 2017 (totalled 91,185) declined by 10% when compared to new cars sold during the first half of 2016.

The SIMI/DoneDeal report highlighted that a combination of factors, including rising housing, rental and health insurance costs and uncertainty surrounding Brexit, were affecting disposable income spending and making consumers cautious about purchasing big-ticket items such as new cars.

During the first six months of the year, new car sales declined in every county, with Donegal experiencing the largest decline at 18.6%, while Cavan had the smallest decline of 4.4%. New car sales in Dublin accounted for 40.6% of the total new car market, the report showed.

The market share for hybrid vehicles increased from 1.6% of the market in the first six months of 2016 to 3.2% of the market in the same period in 2017, according to the Report.

At the same time, there has been a welcome rebalancing of the diesel/petrol market shares and it is likely that this trend is set to continue toward equality between the two fuel types. Registrations of new diesel cars, reduced from 71% of the market in the first six months of 2016 to 66% of the new car market in the first half of 2017. There was a small decrease in new petrol car sales, which were down just 1% and they accounted for 30.2% of all new cars sold during the first half of 2017.

Imported cars, the vast majority of which (97%) are from the UK, continued to be a significant part of the overall car market. It showed that during the first half of the year, 46,004 used cars were imported, which represented an increase of 42.6% compared to the first half of 2016.

The SIMI/DoneDeal Review also highlights that nearly half (49%) of all imported used cars during this period were five years or older, while the diesel share of used imports is just over 79%. Sterling weakness and a scarcity of second hand cars due to the collapse in new car sales from 2009 onwards, were the main factors behind the strong increase in used imports.

The report also shows a number of price decreases in the cost of motoring. The average price of a new car in May 2017 was 4.1% lower than a year earlier, while the cost of motor insurance in May 2017 was 8.4% lower than it was a year earlier.

Against this background, Jim Power Economist and author of the SIMI/DoneDeal Report said: “As we move into the second half of the year, all of the factors that influenced the motor trade in the first half will remain relevant. Economic growth will be supportive, but financial pressures on consumers and the uncertainty around Brexit are likely to continue to weigh on big-ticket items such as new cars.

“At the same time, imported used cars will remain popular. For the full year, the likelihood is that new car registrations will be 10% down on last year. This would translate into total new car registrations for the year of 132,000.”