New cars sales top total for last year – but reg system still a problem
Great news today for an industry that has taken a battering in the recession: new car sales so far this year now exceed the total for last year, with 57,898 10-registered cars on our roads, up 438 more than the total sold last year.
According to Alan Nolan, director general of the SIMI, this milestone in the recovery of the industry is down to the Government’s scrappage scheme. According to Nolan: “We didn’t expect to be hitting the 57,000 mark in May. At the beginning of the year we predicted 70,000 new car sales for 2010. Now, we are looking at considerably more. Our proposals last year estimated that around 10,000 scrappage scheme cars would be sold, but we also predicted that one of the real benefits of scrappage would be to kick-start the demand for new cars.”
It has certainly done that. It now seems likely the end-of-year figure may well reach 80,000.
Yet scrappage, for all the credit given to it for the market’s recovery, still only accounts for just over 5,000 of this year’s sales.
Arguably more important to the recovery of the car market is the dramatic drop in prices in the last 12 months. After more than a decade of creeping price rises, there is now incredible value in the market, with several entry model cars falling below €10,000 and premium saloons down by up to 15 per cent in some cases.
Closer inspection of the sales figures show that the most significant shift in buyer habits has been the focus on emissions. The Government’s move in July 2008 to base the tax system for new cars on emissions levels has been an unqualified success when it comes to changing consumer tastes.
It has had a far less beneficial effect for the Government’s income. The trend towards downsizing continues apace and tax income from VRT and motor tax is down significantly. The same is likely to be happening within the car industry itself, where smaller cars don’t carry the same profit levels as their bigger counterparts.
If scrappage can claim credit of one major shift in consumer perceptions, it’s that owning a 10-registered car is now socially acceptable. Last year it was difficult to own an 09-registered car while so many families were suffering from cutbacks and rising unemployment.
The scorn that some drivers received on the roads last year simply because of the number plates on their cars raises an issue that now needs further consideration.
If we are to help the long-term survival of the motor industry and the thousand it employs we need to reassess our number plate system. There remains far too much focus on start of year sales, driven largely by a registration system that gives such prominence to the year of registration. It creates an unnecessary social status issue, that means dealerships are over-run at the start of the year and virtually idle from the autumn period.
Removing the year from the registration plate seems a sensible approach. The industry can do their bit as well: ensuring that trade-in prices take account of the months of ownership rather than simply valuing all cars for a single year under the same price bracket. There are many suggestions for an alternative to the current year system. It’s time to open the debate.