The Irish Times view: Difficult road ahead for the motor industry

The motor industry is a case in point when examining the challenges associated with easing the coronavirus lockdown. One of the hardest hit sectors in the financial crisis, it never fully recovered in the years that followed. Part of this was self-inflicted: the Volkswagen emissions scandal accelerated political moves to drive consumers towards a new era of electric power. Amid talk of diesel bans, rising taxes on petrol and diesel models and ever-better electric cars, many consumers decided to keep their wallets closed. Then came the Brexit vote, with weaker sterling luring buyers to UK imports. Now it’s the Covid-19 closures.

The car rental market – 16 per cent of new car sales last year – has all but vanished

Amid warnings of significant job losses in an industry directly employing 45,000 here, car dealers have been desperate to get back to trading. While health and safety is the over-riding concern when deciding which businesses to reopen, it is worth considering that modern motor showrooms are spacious enough to cope with the current social distancing rules. Customer footfall is also much lower than in regular retail operations.

Widespread relief

Initially the Government plans stated only servicing and repair work could resume today. Regular showroom sales were pencilled in for June 8th. So there was widespread relief in the trade on Friday when it was confirmed that sales operations were allowed return, giving dealers an extra three weeks to pitch for business for the new registration period, which begins in July.

Even with the extra time, however, the road ahead looks to be a struggle. Consumers will be wary of investing in big ticket items, like cars, in the current economic climate. Meanwhile the car rental market – 16 per cent of new car sales last year – has all but vanished. Despite calls for tax reductions to boost sales in July, such action seems an unlikely prospect in so tight a timeframe, especially without a new government in place. Trying to rescue the car market this year will be a monumental struggle for the motor trade. Provided proper social distancing rules are met, allowing them to reopen from today seems a sensible measure.