New year car sales down over 66%

A DRAMATIC drop in new car sales has left registrations down over 66 per cent in the first 20 days of the year, with several …

A DRAMATIC drop in new car sales has left registrations down over 66 per cent in the first 20 days of the year, with several brands recording drops of over 90 per cent. The impact is also being felt by Government, with estimates suggesting the tax revenue on car sales could be down by over €1 billion this year.

Industry figures are demanding urgent Government assistance, with annual new car sales likely to fall to 70,000 this year, down from 151,607 in 2008.

It coincides with the announcement of a yesterday of £2.3 billion (€2.5 billion) in loan guarantees and investment grants to the British motor industry, along with £100 million (€107.6 million) for the retraining of auto workers. Britain’s business secretary, Lord Mandelson said: “The automotive industry – with its near one million employees from manufacturing to retailing and £10 billion worth of added value to the economy – is in the front line of the downturn, with output falling faster and further than any other sector since the summer.”

In what should be the busiest period of the year for new car sales, the Irish market stood at just 11,231 new registrations by January 20th, according to provisional figures seen by The Irish Times. Over the same period last year, sales hit 33,795.

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The premium market has been hit particularly hard. BMW registrations fell from 1,476 to 268, while Land Rover recorded just 12 passenger vehicle sales compared with 312 over the same period last year.

The fall has been no less dramatic in the mainstream market. Chevrolet recorded 40 new car sales compared to 416 last year. Of the big selling brands, Volkswagen are down 72.3 per cent to 986 cars from 3,554 last year, Toyota recorded a drop of 65.3 per cent to 1,668 new cars, while Ford was doing marginally better with sales of 2,059, a drop of 54.7 per cent.

The bad news continues in the commercial vehicle market, where sales of vans and pick-ups fell by 82 per cent to just 1,040 for all brands in the first 20 days. Sales of heavy goods vehicles stood at just 296.

In Dublin, 3,787 new vehicles were registered by January 20th, including 3,394 new cars. In Leitrim, just 48 new vehicles were registered.

The Society of the Irish Motor Industry (SIMI) has called for the introduction of a scrappage scheme to give the motor industry a much-need boost. “If there is not a move on this within a matter of weeks, the year will be gone,” says Alan Nolan, director general of SIMI. “March 1st would be the latest [the scheme] could be introduced to make any difference but we would prefer it immediately. It might not have the runaway effect that the previous scrappage scheme would bring, but it does have the capacity to boost business.”

Germany and France have already introduced scrappage schemes. In Germany, dealers reported a strong sales lift – expected to reach 20,000 – on the back of a scheme granting €2,500 to owners who swap cars nine years or older for new or nearly new models.

The French government claims a scrapping bonus will lift vehicle sales by 100,000 units this year.

In the last quarter of 2008, SIMI estimates the motor industry lost 3,000 jobs and there are fears the situation will worsen if there isn’t a fast solution to the poor start to the year. Nolan estimates the potential tax revenue shortfall could be over €1 billion.

Michael McAleer

Michael McAleer

Michael McAleer is Motoring Editor, Innovation Editor and an Assistant Business Editor at The Irish Times