Car Sales Slowdown after Scrappage Boost

  • 21 Jul 2011
  • in New Cars
  • by Shane Teskey

The latest figures from the Motorcheck.ie Car Index show that registration figures for new cars have significanty dropped since the end of the popular scrappage scheme on June 30th.
Comparing figures for July 2011 with that of 2010 we can see that the market has dropped 32% demonstrating the importance of the scrappage scheme to the market last year. The question is what will happen next?
Can the industry hold on to the 2,200 jobs created by the scrappage scheme or are we likely to see further closures as sales dwindle?

What do those on the ground think?

I asked a selection of industry insiders for their view on the current state of the market.

Normally July is a quiet month for car sales with car buyers enjoying their holidays rather than visiting car showrooms. July 2007 was the last year where there was no mitigating factors (08 had VRT changes and 09 was the start of the crash) and retail sales for that month were similarly quiet but retail sales for us this July are up on 2007.

The key thing we are missing however are sales of commercial vehicles which would have been a very important part of the business in years gone by.

The jury's out on what the buyer mentality is in a post-scrappage market but we would remain hopeful for a good start to 2012. ”

– Nigel Brennan, Huton and Meade

Robert Bradley
Robert Bradley
Anyone who geared up to accommodate the extra workload that scrappage brought might have to lose a few bodies.

From our perspective we're glad to see some normality coming back to the market. We're experiencing significantly more interest in used cars now that the price of new cars has stabilized.

We expect Honda to experience some growth come back now that the pitch is level again. Sales levels for us are 'okay'. No boom - No bust!

2012 will be an important year for us as the line up will never be as good. The Landrover Evoque comes to town in September and we expect a lot from that car. It will retail at €45,000 in tax band C. The Range Rover Sport and the Landrover Discovery also benefit from lower emissions with a drop in their tax bracket making them significantly more attractive. ”

– Robert Bradley, Bradley Motors

Bill Keary
Bill Keary
Certainly the scrappage scheme was a great incentive and we're sorry to see it go. I'd be hopeful that the government will do something similarly innovative in 2012 and continue to promote new car sales.

It would be a disappointing step backward if any negative stigma reappeared around the purchase of a new car.

Government needs to understand that as an industry we are still at a very low ebb and sales in excess of 100,000 units will be required to hold onto jobs. "

– Bill Keary, Keary Motors

Padraic Mooney
Padraic Mooney
In my opinion the scrappage scheme was a useful way of oiling the wheel but until we see some real confidence in the market, it's going to be very difficult for new car sales.

It looks as if the number of cars that went out on hire drive this year has virtually doubled so I would expect that the return of these cars next month will put serious pressure on brand new registrations.

After sales and Second Hand sales have become a significant part of our business but a lack of finance is still causing the industry some difficulty.

I predict a difficult year for the industry in 2012. "

– Padraig Mooney, Mooneys

Share

by Shane Teskey
All author posts
Michael Aherne - July 21, 2011 at 5:36 pm
I agree, 2012 will be a very difficult year but this is the business that we chose to be involved in. We need to to take any future incentives, manufacturer or government and use them to the best of our ability to generate the business we need to survive. Everyone has a new product/incentive on the horizon. I know you all think and act positively ! Go for it !
Shane Teskey - July 21, 2011 at 5:37 pm
Thanks for the comment Michael.
Auto Mechanic Dublin - July 22, 2011 at 7:20 pm
That's the spirit Michael "Yes We Can!" To be bluntly honest though I don't think you'll hear a lot of people in the repair business complaining...
charlotte McClean - July 22, 2011 at 10:30 am
We do not sell cars as you know Shane. Business has been down at least 65% for us over the past 2 years. The scrappage generated a little extra work on Sunroofs leather etc.,. July is a wash out so far, cannot see it getting any better before December. We deal with different dealer franchises all over the country, and the word from a lot of them is that they are doing little or nothing this month. One very Big dealer I spoke to, said Saturdays would be one of their busiest days for sales, Last saturday they had 3 sales guys in, sold nothing, and only 2 people came into the showrooms. The Goverment should have let the scrappage run till the end of the year at least.... The Motor Trade need some kind of a boost, otherwise there will be more garages closing down,,, I think we in the Motor Industry have suffered enough!!! Something has to be done soon. Charlotte McClean AutoGlaze. Crumlin
Dave Byrne - July 24, 2011 at 11:53 am
Hi Shane, Great work, website getting better and better. So far all indications are showing a decline in footfall in dealerships through July however new car sales decline is not necessarily as dramatic as one might think. The stats, as we all know, are registrations and not sales. Some distributors have given significant incentives to dealerships to register cars over the past few months. Some of these cars were sold however a significant residue of unsold cars were lying on forecourts coming into July. Potential new car customers coming into the dealerships have been switched into these cars thus distorting the data. Have the dealerships the finances or an appetite for more registrations? It will be interesting to see the new car registrations over the next few days.