Cantillon: Rise in car sales mirrors rise in economy

As an economic bellwether, buoyant new car sales are a major consumer indicator. Similarly the sales of new commercial vehicles shows increased activity, particularly in the small business sector. January new car registrations were up nearly 34 per cent on the same month last year. Similarly, light commercial sales were up by the same percentage, while heavy goods vehicle registrations rose by more than double last month, at 492 compared to 206 for the same month last year. It all bodes well for our economic recovery.

The big news from the January figures is the arrival of Hyundai as the best-selling brand, with its Tucson crossover the best-selling model on the market. It has overtaken Volkswagen, which has fallen back to fourth place.

The German brand is still recovering from September's admission that it had fitted cheat devices to 11 million cars worldwide - including nearly 116,000 in Ireland - in order to meet US limits on nitrous oxide emissions. The scandal affected not only Volkswagen models but also Audi, Seat and Skoda vehicles as well. Recalls of these vehicles are due to take place this year, but it clearly has dented the firm's reputation amongst buyers.

Long-term, however, it’s likely the German car giant should be able to rebuild its image and, within the motor trade, few expect the VW brands still to be in fourth place by the end of 2016.

Hyundai's position at the top signals the arrival of the Korean brand as a serious player on the Irish market. It's an impressive ascent over the last 15 years as it moved from being a budget brand, dependent on the popularity of its Santa Fe SUV, to becoming a fully-fledged mainstream brand, pitching against Ford, Toyota and Volkswagen.

Away from the battle of the car brands, environmentalists may be concerned over the falloff in electric car sales. Just 50 were registered last month, down from 115 this time last year. That might suggest the Government-supported electric car plans have been a failure, but in reality many buyers are opting for advanced plug-in hybrids instead of full electric models. Still, the total alternative power segment of the market – from hybrids to full electric – don’t add up to 2 per cent of total sales. For all the promises of a bright new dawn, buyers still seem wary about backing new technology that could be outdated before they go to change their car again.