Drowning By Numbers

Actions have consequences. The Irish car market is unwell.

Top seller 2019. (c) : caroftheyear.org

It’s about three years since I wrote one of these analyses. Back in 2017, when I last did so, the side-effects of Britain’s referendum decision had yet to filter through in any meaningful way. However, some three years later the effects are plain to see. Because despite being outwardly one of the better performing EU member-states of late, the Republic of Ireland’s economy has been hobbled, without Britain having left the EU at all.

Amongst the sectors adversely affected, the car market is amongst the most apparent. Having been on a steady post-crisis growth curve up to 2016, with deliveries that year of 146,672, car sales have bucked more favourable economic trends, aligning closer with Sterling’s value against the Euro – a state of affairs resulting in a significant fall in new car sales with all the resultant knock-on effects that brings.

According to figures released earlier this month from the Society of the Irish Motor Industry (SIMI), new car registrations for 2019 topped out at 117,100, 6.8% lower than in 2018, but 20.1% down on 2016 figures. Of these, diesel accounted for 47%, Petrol 41%, Hybrid 9%, Electric 3%, and Plug-In Hybrid 1% of sales last year. Despite its near-pariah status across most EU nations in the wake of various emissions scandals, diesel-power has (just about) maintained its dominance, although petrol-powered engines are making a comeback. However, hybrid, EV and plug-ins made notable market share gains throughout 2019.

Across the Republic, the top ten car marques by sales are as follows. VW maintained its now habitual first place. Toyota held second, followed by Hyundai, then Ford, Skoda, and Nissan. In seventh place is Renault, followed by Kia, then Peugeot and lastly, Audi. Apart from Toyota, Skoda and Peugeot, all top ten brands experienced a fall-off in demand through 2019, while once top-ten regular, Opel have dropped out entirely with a resurgent Seat nipping closely behind.

Of the remainder, only Land Rover (+11%), Mitsubishi (+18.5%), Lexus (+3.5%), Tesla (+125%), Jeep (+25%), DS Auto (+171%) and Bentley (+16.6%) posted sales gains last year – albeit, the latter two from an extremely low base. The remainder suffered varying degrees of reversals, the most significant however being Mercedes (-20%), Jaguar (-24%), Fiat (-39%), Ssangyong (-41.9%), Subaru (-50.7%), and Alfa Romeo (-55%).

Modelwise, the top ten looks a little like this. The Toyota Corolla surged back to first position on the back of the new generation, with Hyundai’s once first-placed Tucson second, and Nissan’s eternal Qashqai, VW’s Tiguan, and Skoda’s Octavia making up the first five places. Sixth was Hyundai’s Kona crossover, followed by the VW Golf, Ford Focus, Toyota Yaris, and in tenth, Toyota’s can’t get enough of ’em C-HR. Five compact crossovers and five conventional, mostly C-segment hatchbacks. The modern day car market in a nutshell.

But another more significant, if hitherto unreported factor is skewing the Irish car market. The increasing cost of new cars has for some time now fuelled a burgeoning market in second-hand imports from the UK. Posting record numbers for the second year running, SIMI figures show 113,926 imported used cars entering the country in 2019, registering an increase of 13.1% over figures for 2018 (100,755) – a figure that comes alarmingly close to equalling that of new car sales.

Now of course the primary reason some Irish motorists source their (mostly pre-owned) cars from the UK is affordability. But there are others. One of these is availability – there simply being more choice to be had from a far larger pool than in the Republic, especially when it comes to hybrids, petrol-engined vehicles, or indeed anything outside of the orthodox.

Furthermore, owing to a combination of comparatively better roads, a more embedded ethos of preventative maintenance and a more stringent vehicle testing regime, UK cars can be found in better overall condition to that of their Irish equivalents. And with British motorists jettisoning their diesel-engined cars with considerably more gusto, there are probably some pretty decent deals to be had. Nevertheless, the purchaser still faces the costs of getting the vehicle back from the UK, of paying the (not inconsequential) import duties, prior to forking out for the often extortionate annual vehicle tax.

But the prospect of pre-owned, predominantly diesel-engined cars entering the country is not filling everyone (apart from their proud new owners, one imagines) with glee. Least of all the representatives of the Irish motor trade body. The SIMI is currently lobbying government to shift the taxation burden away from new vehicles, towards older imports to help discourage this trade, SIMI Director General, Brian Cooke stating; “We cannot allow Ireland to continue as the UK’s dumping ground for older more environmentally damaging cars, which only improves their environmental performance at the expense of Ireland’s”.

Now, setting aside the vested interest implicit in Mr. Cooke’s statement, while it’s clearly in the interests of the domestic retail industry that Irish motorists choose lower-emitting vehicles (as long as they buy them in this country at least), is penalising motorists who are simply exercising their consumer rights the ideal way of achieving this?

Ireland is currently heading into a general election, with politicians making all manner of climate-related promises, but the reality on the ground is that the Republic is simply not geared up for the wholesale electrification of its vehicle fleet being promised, even assuming the requisite demand can be stimulated or enforced.

Like most countries, EVs will make sense for those Irish motorists who make short commuter journeys and can charge their vehicle from their driveways – and even more to the point – those who can afford the cost of entry. Venture further out of the affluent urban centres however and the situation is likely to be somewhat different.

Yet as the political contenders attempt to outgreen one another in the quest for electoral gain, we ought to remind ourselves of what occurred in this country in 2008, when vehicle taxation became CO2 emissions-based, a decision which shunted motorists almost wholesale towards the black pump. Now a similar one-size-fits-all push towards electric vehicles risks another equally blind alley.

All of which begs the question as to who would be an Irish motor retailer in 2020, given the likely manner in which the road to 2030 is being paved?

Datasource: SIMI/ beepbeep.ie

Author: Eóin Doyle

Co-Founder. Editor. Content Provider.

15 thoughts on “Drowning By Numbers”

  1. I don’t agree with the statement that pushing electrics would be another blind alley, just because diesels had this outcome doesn’t mean Evs are headed in the same direction. Ask any diesel owner what the attraction was for their choice and it will probably be economy at the pump, torgue, range and tax advantage.
    Moving to an Ev or PHEV will tick all these boxes for the consumer while solving at source pollution and driving clean energy production neither of which will disappear in tomorrows world.
    With the UK already several years into Ev purchases there are numerous used models available for export.

    There is no doubt in my mind that electrification is viable now and will dominate in future if prospective buyers open their minds, do the research and choose the correct type for their needs.

    1. DGatewood: With due respect, while my point regarding EVs can be construed as being a blanket view (and yes, I remain far from convinced as yet), I was talking primarily about the Republic of Ireland where the charging infrastructure is laughably underdeveloped, where the rising cost of new cars is prohibitive (hence the thriving market in imports) and where the average punter (especially in the predominantly rural heartlands) is likely to be less receptive to the new than his/her UK equivalent.

      “With the UK already several years into Ev purchases there are numerous used models available for export.” Says you. I’m sure that statement will be warmly received by the Irish motor trade, who could face ruin unless this trade imbalance can be stemmed. Of course we can get Darwinian about matters and suggest that, ‘well, they brought it on themselves’, but the margins on new cars nowadays are vanishingly small, making an already a tight balancing act to remain in business an even more precarious one.

      Daniel: From what I can gather, the trade in Japanese imports has more or less dried up; for the reasons you outlined, yes, but also, with the Irish market so skewed towards diesel, the predominantly petrol imports from Japan no longer made financial sense. Also, owing to the often wide differences in specification, parts sourcing proved difficult – near-impossible in some cases with models which were never offered on this side of the world in the first place. With moves back towards petrol hybrids however, this may change, as there is likely to be plenty of suitable JDM fare to be found- and in Ireland, hybrid is where I see the market predominantly going – for the time being at least.

      Incidentally, there are many second-hand car dealers here who source their stock exclusively from the UK. Low-mileage cars, mostly between two and four years old. You haven’t a hope of selling anything older. Some people of course opt to take matters into their own hands. I spoke to an Irish chap on my flight (yes, you heard me) home, who had gone over the UK to buy a (hybrid) car. He was flying back because the (allegedly dodgy) deal fell through. Caveat emptor.

      Holding on to (or purchasing) older cars isn’t much of an option either. Obtaining insurance for a ten year old car here is becoming highly problematic these days. Some insurance companies won’t even quote you, I’m told. Car ownership is an increasingly pricey necessity on this small island.

  2. An interesting report, thank you Eóin. I imagine that the biggest driver in the demand for second-hand UK vehicles is simply the weakness of Sterling vs the Euro. Last time I looked, a few years ago now, the import taxes imposed on such vehicles more or less neutralized the savings to be made (which was probably the intention), but the post-Brexit referendum fall in the pound has made such imports attractive again.

    Are individuals doing this for themselves, or has any enterprising person thought of offering a “source and import” service? I ask because I recall that a similar business flourished briefly in Ireland in the early 1980’s. The very strict mandatory Japanese test regime for older cars kicked in at (I think) four years. It encouraged many owners to trade in against a new car just before their car reached that age (which was the test’s true purpose, to stimulate the sales of new cars). As a result, there was a glut of four-year old second-hand cars in Japan for which there were no buyers. Someone thought it would be a good idea to export them to other RHD markets, including Ireland.

    I remember seeing rows of such cars lined up at Dublin Port, the vast majority being white, for some reason. To the observant and geekish (That would be me.) they were instantly recognisable on the road as they had unusual Japanese-specification badging and model designations. Whether they satisfied Irish (or EEC) automotive regulations is a moot point, but I doubt anyone paid much attention to this.

    I believe many owners subsequently realised that they were not quite the bargains they seemed: the combination a lesser standard of corrosion protection than official export cars, a long sea voyage and Ireland’s famously damp climate saw many of them rust away with alarming enthusiasm!

    Incidentally, I’m pleased to see the Corolla back at the top of the charts, for reasons of nostalgia only. Your photo shows the saloon version. Are such cars still popular in Ireland, or is it the hatchback version that’s the big seller?

    1. Daniel, to answer your question about the varieties of Corolla sold in Ireland last year we have the resources of the eternally useful beepbeep.ie whose “motorstats” section tells me that the Corolla was divided up as follows in 2019:
      Saloon 53%
      Hatch 42%
      Estate 5%
      Of all those, hybrids were 87% and will be 100% from now on. Oh, and 49% were grey. Red came next, by way of unexpected variety.

    2. Thans for the data, DP. Whatever about the inexorable rise of crossovers, I’m still fascinated by the fact that small (well, not so small anymore) non-premium saloons are still popular in Ireland relative to their hatchback siblings, when they are all but extinct in Great Britain.

    3. A place where lots of (often white) JDM RHD cars can be found are the far Eastern regions of Siberia.
      It’s much easier and cheaper to bring a car from Japan to Vladivostok than to transport it from Moscow.
      The risk of buying a Japanese car unseen is low because Japanese auction descriptions are exceptionally detailed and honest/realistic and Japanese used cars normally are meticulously prepared before they get sold with every surface regularly touched by the driver replaced like new steering wheel, new gearshift knob, new pedal rubbers and so on. As white is a symbol of cleanliness and general well being it’s small wonder Japanese drivers prefer white cars.

  3. Whenever there’s a report of Tiguan sales overtaking Golf’s, it’s a relevant and alarming sign that the days of the conventional, down-to-earth motorcar are nearly over. In the case of the Irish market, apparently
    the Octavia still rules the conventional-minded motorists’ mindset
    – and that seems to be largely due to the timeless, etalonic styling/packaging/footprint nature of the Octavia Mk3 – really opulently sized whilst maintaining a healthy layer of understatement and ‘anti-show-off’
    about it. This seems to be clicking well with the sensible nature
    of a typical Irish motorist.

    Whilst talking about the typical Irish motorist, someone used to claim that the B-segm. sedans are a fast-growing aspirational category in the mass-volume segments of the Irish market. If that is the case, perhaps the new Logan Stepway (sedan) could make its way to Dacia’s Irish showrooms ?

    Its recent appearance in certain Dacia markets, seems to be, at least to my eyes, more than just a superficial attempt at marrying the conventional
    with the SUV-entional.

    1. Alexpinaweiss: The compact saloon has been a staple of the Irish market for a great many years, appealing to the broadly conservative tastes of the Irish motorist. It is however, I’m a little sad to relate, a segment in retreat. The Irish motorist, much like everywhere else, has been convinced of the ‘merits’ of the crossover, which can be justified by the appalling road conditions and frequent poor weather, despite mostly being no more capable of dealing with either than their more conventional, lower-riding equivalents.

      Another factor here by the way, is that OEM dealers are finding it increasingly difficult to obtain the new cars their customers want – Ireland being very low on the priority list for most carmakers – especially during these febrile times.

      The Octavia is a car that matches the needs of a large body of motorists in this country – especially those with families, so its lasting success is no great surprise really. Skoda have been very smart (or simply clever…) in how they have marketed themselves in this country and their offerings are closely aligned with the needs of the Irish buyer. More so I would suggest than Dacia, who despite making gains here are perceived as a little too much of a Lenten sacrifice. Skoda’s balance of value and image suits the broader market better.

      We still may not opt for the chocolate biscuit, but we’ve moved on a little from the ‘Rich Tea…’

  4. Eóin, thank you for these insightful updates.

    I would agree that the Irish market is perhaps indeed a tad too clever so as to be tricked into the Continent-wide USP of Dacia that made it such a hit
    notwithstanding that it actually ceased to be a low-cost car, nominally.
    Its original, essential appeal (as it was initially marketed as such back in 2004-2005) is in it being a 6-7.000 Euro car (maximum), so as
    to represent a viable ‘new-car-old-tech’ alternative to a tired,
    used i.e. Golf/308.

    At the same time, its success has shown that perception is still the king,
    cementing the old ‘no second chance for a first impression’. The inherent spatial advantages of its (inaptly named) ‘B0’ platform helped the perception of great value so much, that it tended to mask the obvious, demand-driven constant rise of its prices – ultimately turning ‘hype’ into permanent
    ‘brand value’.

    Still, the appearance of the Logan Stepway is a breakthrough that might, perhaps, one day see to the appearance of a non-Variant Cross-Passat.

    If the mainstream swallows this idea, it would be a final proof of Renault’s superior strategic marketing (which that the Dacia success has already confirmed
    rather solidly.

  5. Very interesting to get a different perspective, Eóin. Have they sorted out the vehicle tax problem, where vehicles were put in to more expensive categories as a result of the new WLTP procedures? I read that if a correction isn’t made, it could really hurt the market.

  6. Eóin, talking about s/h imports you haven’t mentioned what has now become a huge issue: NOx emissions. Ireland has been perceived as a dumping ground for used diesels and to combat this a NOx charge has been applied to diesels which has made a significant difference to the economics of importing them. More than a few have been caught out by buying a car in the UK and suddenly discovering that the price quoted on the Revenue’s VRT calculator doesn’t include this.

  7. Eóin rightly points out that the Japanese import trade has almost dried up, but note the “almost”. There’s still a trade in hybrids. I often see JDM Honda Insights and Jazzes and I was surprised recently to find a warehouse near Carrigtwohill in east Cork that’s full of them, all with consecutive numbers so they’re stock rather than being a random selection of used cars. Why they’re sitting there losing value (they’re all 2010 to 2012 and have just got a year older) is anybody’s guess.

  8. Funny little market the Irish market. Is there any other European countries that has a Toyota or any other Japanese car as the number 1 car sold ?

  9. Interesting article for a general knowledge enthusiast like me. The one thing that stands out above all for me is the statement that it’s hard to get insurance for a ten year-old vehicle in Ireland. Why on earth is this so? Do they suddenly dissolve? According to Statista, the average, not the oldest, vehicle in my country Canada is 9.66 years. Out on the West coast with weather not dissimilar from Ireland’s, the average age is considerably higher, thereby dragging up the average, but apparently not worthy of insurance if Ireland’s norms were applied. I don’t get it.

    The Corolla hybrid is a very competent vehicle, and capable of handling both lithium-ion or the older nickel-metal hydride battery type. The latter is a bit heavier, but works better in the cold, so that’s what Toyota gives us. Be interesting to know what type Toyota specifies for Ireland.

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