Actions have consequences. The Irish car market is unwell.
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