HAVING EMERGED from the scrappage scheme, a crutch to an otherwise crippled motor sector, can the industry stand on its own next year?
As in Germany and the UK, car sales here have dropped significantly after the end of scrappage subsidies. New-car registrations in July, August and September fell by 35 per cent each month when compared to the same time last year. It means the market for this year, which was up 14 per cent at the end of June, is now up just 4 per cent. If the market for 2011 closes at 90,000, it will be a good year, all thing considered.
But what of the year ahead? Predictions for new car sales figures for 2012 vary from 70,000 to 80,000, depending on who you ask.
In mid-2008, the sector saw a change to the taxation system; 2009 brought the recession; and for 2010 and half of 2011 the industry was bolstered by the Government-backed scrappage scheme. Next year, therefore, could be its first supposedly normal year since 2007.
In the last four years there has been a seachange in car choices, with buyers preferring diesel to petrol: the 70/30 split between petrol and diesel of pre-2008 has now gone in diesel’s favour. So significant is the shift that some major models, such as the Ford Focus, are now only offered in diesel in Ireland.
The fundamentals remain the same however, and six of the top 10 models sold in 2007 are still in the top 10 this year, the most notable change being that Opel’s place in the top-sellers has been replaced by Renault.
Of the new cars sold in 2011, 90 per cent occupy the two lowest emissions motor tax bands, meaning there is virtually no market any more for gas-guzzlers. Sales of large SUVs have plummeted.
The Irish buyer in now so clued into motor tax that it has become a deciding factor in their choice of new car. But they can be blinkered by this, paying more for a diesel version of their chosen car when compared to a petrol equivalent; often more than they would ever hope to save in lower motor tax during ownership.
As for the promised electric-car revolution, it has yet to happen. Despite the pomp and fanfare heralding the arrival of both charging points for electric cars and of the Nissan Leaf, the results so far have lacked spark. Neither the charging points nor the cars are greatly in evidence across the island.
Perhaps the most alarming statistic for electric-car flag-wavers is that sales of the Nissan Leaf and the Range Rover Sport are just about the same; the Leaf’s 43 units trumping the Range Rover’s 42.
Nissan expected to sell 500 Leafs in Ireland 2011, but initial delays with grants compounded a lack of public appetite for this emerging technology. Renault’s entry into the electric-car market next year could boost confidence in the technology, as might be its decision to offer a leasing scheme for its cars.
Toyota has been the top-selling marque in Ireland for four out of the last five years, swapping places with Ford in 2010, but Volkswagen has emerged as the most likely brand to break that duo’s dominance. However it will be tough fought battle, with the arrival of a new Yaris, traditionally one of the big sellers for Toyota in Ireland, the latest in a line of models that will make it difficult to knock them from the top any time soon.
However this week Hyundai Ireland, during a presentation of its 2013 market estimates, predicted VW will top the market by then with 13 per cent, followed by Ford and Toyota, and the Koreans themselves in fourth spot.
As for the thorny issue of tax, change are on the way, if not in this budget, definitely in the next.
In the trade, there is talk of a change in the system to tackle the “BMW 520d issue”, whereby a €45,000 luxury car is charged only €156 in motor tax. Only Government officials know how that might happen, but experience suggests that for every action in terms of tax, there are knock-on consequences for the market at large.