Car sales stuck in reverse
One of the trends that we have been seeing in car sales is motorists shunning diesel vehicles for petrol and plug-in versions. But while consumer behaviour is changing in response to the eventual phasing out of diesel cars, we are also seeing overall sales volumes continuing to follow a downward trend. This highlights a lack of consumer confidence which in turn reflects a squeeze on household incomes. In short, new car sales have been in a state of managed decline over the last two years, and this appears to be continuing.
Just over 5,500 new cars were sold in Northern Ireland last month – that’s the lowest June figure in six years. Looking at the first half of 2018, close to 31,000 new cars joined Northern Ireland’s roads. That’s the weakest H1 sales performance since 2013 and represented a 3.5% y/y decline. Back in 2007 almost 41,000 cars left the showrooms in the first six months of the year.
Local dealers have seen new car sales stagnate in 2015 and fall in both 2016 and 2017. This year is set to mark the third successive year of decline. However, it is important to point out that the headline sales volumes conceal contrasting fortunes between different brands and models. There are always winners and losers in all markets. In the meantime, the average age of the cars on our roads is going up. The ageing of our car population is a sign of consumers continuing to tighten their belts.
One of the other factors that could impact on the market is Motability. Given that such a significant number of new car sales are purchased this way, sales will be sensitive to changes in the terms and conditions of this scheme or access to DLA.