Car trade with a lot on its plate

Twice-yearly registration has failed to remedy the congested sales patterns

Despite the new number plate system it would seem that the same 55 per cent of new car sales are taking place in the first three months of the year. Photograph: Niall Carson/PA

Despite the new number plate system it would seem that the same 55 per cent of new car sales are taking place in the first three months of the year. Photograph: Niall Carson/PA

 

While there was much ridiculous ballyhoo to the effect that the change to a twice-yearly registration plate change last year was to avoid having an “unlucky 13” number plate, the fact is that the change, or something similar, had long been sought by the Irish car trade.

Ever since the switch to the year-county-number plate system in the late 1980s, Irish car sales had become bunched up at the start of the year. In fact, as much as 55 per cent of the total year’s sales took place in January, February and March, as car buyers scrambled to be among the first with a new plate.

None of this was especially good news for the car trade. It meant that yearly planning had to focus on a scant three-month window to shift significant amounts of metal, it meant ordering new cars to arrive in dealerships in the middle of winter when the weather can play havoc with delivery schedules and it meant that often dealerships would be more full of tumbleweeds than customers from April onwards, and never mind the overheads and salaries that still needed to be paid.

For the manufacturers, the situation was equally frustrating. A bad start to the year could not be recovered and any company that wanted to launch an exciting new model was doomed to failure if it did so after Easter. Something had to change and the 131 and 132 plates were seen as the solution. Create a second plate change in July and the market would even out, cashflow for dealers would become easier and the market as a whole would get a “second chance” in the summer.

The figures for this year and last would suggest that this has not happened, though. In fact, looking at 2013 and taking the projected figures for the end of this year, it would seem that the same 55 per cent of new car sales are still taking place in the first three months of the year. Worse still, the second plate in July, far from spreading out sales, is simply creating a second sales spike, deflating the sales of the months around it.

“The dual registration of vehicles was to spread the sales out throughout the year rather than the front-loaded initial three months as was the norm” Michael Rochford,

managing director of Motorcheck.ie, which has been breaking down the figures, told The Irish Times. “The dual registration system has done nothing to decrease the trend in the first three months. In the first three months of 2013 53 per cent of the new car registrations for the year were made. In 2014 this figures increased and 54 per cent of all new passenger registrations were in the first quarter. So taking the last seven years and including the heady days of 2008 the average percentage of registrations taking place in the first quarter was 55 per cent of the yearly total. If we omit the dual registration years of 2013 and 2014 and take the previous five year average it is also 55 per cent. So there has been no change for passenger vehicles in the first quarter registrations.

“So what has happened to the second quarter trend? The effect of the dual registration has done little to the second quarter except reduce the number of sales in the market in this period. The percentage of the total yearly new car registrations in 2013 was 17 per cent and 18 per cent in 2014 of the forecasted total. These are the lowest Q2 percentage registrations in the last seven years and well below the seven year average of 24 per cent. Furthermore, with the exception of 2009, the actual number of new car registrations were lower than any of the last seven years.”

Drilling down into some of the specific sales figures also makes for sobering reading, as they reveal the effect of the July sales spike. Compared to 2010, actual sales numbers for the last quarter of October, November and December are down by about a half, with all of that trade hoovered up by the plate change in July.

The Society of the Irish Motor Industry (Simi) appears sanguine about the effect, however. Simi director general Alan Nolan told us that “there were two things the plate change was supposed to do: it was to move sales out of the front half of the year; and also to give a second chance to a year if the things got off to a bad start.

“Based on what we wanted it to do, looking back as far as you want to check, about 18 per cent of registrations will have occurred in second half. Last year that was 28 per cent, this year it’s going to be around 32 per cent. That’s a substantial shift. We’re only two years into it and I think those figures are extraordinary for year two.

“Are we happy that 55 per cent of sales are still in the first quarter? It’s a reality of the way that cars are purchased in Ireland by consumers. To go back to the previous system, people who bought in January felt that they got a full year’s ‘value’ from the plate. Creating two number plates gives people the opportunity to do that again in July.

“They want the car as early as possible once they’ve decided to buy it. It would be lovely to spread the sales out evenly in every month but the industry has to react to what the customer wants.”

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