Cantillon: One extra digit is just not enough yet

7,095 new private cars were taxed for the first time in May


Retail sales figures were dragged down last month by the lacklustre performance on motor trade forecourts. Month-on-
month retail volume in the motor trade fell 5.5 per cent, according to the Central Statistics Office. This pulled the overall monthly figure down from a 1.4 per cent increase to a 0.1 per cent rise.

According to the data, 7,095 new private cars were taxed for the first time in May, a drop of 11.2 per cent on the same month last year, which was hardly the apogee of recent forecourt activity.

New car registration figures for June will be released on Monday and all expectations are that they will be equally grim. Preliminary figures suggest the market this month is running at close to 1,400, less than half the figure for June last year, although a last-minute registration surge, in line with every other month this year, is likely.

Undoubtedly the few customers still out there have postponed delivery until the new 132 number plate is introduced on Monday. Before this year most new car sales took place in the first three months as buyers sought a little one-upmanship on neighbours with a new car boasting the latest registration. Under the new scheme it was hoped that there would be a similar surge in July.

The word from the forecourts is that consumers have not fully grasped the changes however. Some say the public mistake the number plate change as a one-off for this year, designed to overcome some form of superstition over the number 13. Others report that even those aware that it is a permanent change to six-monthly registration periods have far more important demands on their precious cash than a new car. Uncertainty in the public sector – traditionally a reliable source of business for the motor trade – over Croke Park II and the Haddington Road agreement has affected sales. Then there is the property tax, the slip back into recession and the general lacklustre consumer confidence to combat.

The new system may pay dividends for dealers in years to come, but few are expecting much of a lift, if any, in sales of cars with the 132 registration.