Dealerships endure worst August in five years for new car sales

Industry figures show that Northern Ireland has experienced its worst August for new car sales in five years
Gary McDonald Business Editor

CAR showrooms in Northern Ireland have experienced their worst August for new sales in five years, the Society of Motor Manufacturers and Traders (SMMT) has confirmed.

And the expected autumn pick-up for dealerships is now unlikely to materialise given the squeeze on household budgets, notably fuel, with average price of a litre of petrol and diesel increasing for the eighth successive week.

According to the SMMT, just 3,647 new cars were registered in Northern Ireland in August, down 9.3 per cent on the same month last year.

Some 39,580 million new cars have been sold so far this year, a decrease of 5.5 per cent on the same period in 2016.

It's the weakest year for new car sales in the north since 2013 (37,762) and compares with almost 52,000 sold at this stage in 2007.

Ulster Bank chief economist Richard Ramsey, who closely monitors the new car sector, described the numbers as "disappointing".

He said: "August represented the fifth successive month of year-on-year declines for both Northern Ireland and UK dealers.

"Indeed Northern Ireland has only posted one month of year-on-year gains in eight months (March), and this was linked to changes in vehicle excise duty rates which artificially inflated sales that month."

He added that the number of new cars sold here in August was 30 per cent below the figure recorded a decade ago which coincided with Northern Ireland's unprecedented property boom.

"Back then, housing equity withdrawal frequently found its way to car showrooms, but not any more," he said.

Mr Ramsey added: "In recent years, the premium brand market has outperformed the overall market. Therefore the headline declines in new car sales are concealing contrasting performance between different brands – with fewer overall sales, it is competitive market and those brands that adapt to consumer needs and wants will do very well whilst those that don't, won't.

"Indeed, some brands have been posting record sales figures while others are experiencing multi-year lows. As a result, the second-hand market has become more important for an increasing number of new car dealers."

He said he also expects to see the battle of the brands to continue with competition in the second-hand market expected to heat up.

In the UK as a whole, 76,115 new cars were registered in August, down 6.4 per cent on the same month last year, meaning 1,635,488 cars have been sold so far this year (a decrease of 2.4 per cent on the same period in 2016).

SMMT chief executive Mike Hawes said: "August is typically a quiet month for the new car market as consumers and businesses delay purchases until the arrival of the new number plate in September", adding that the figures for 2017 so far are "broadly in line with expectations".

Demand for diesel cars continued to plummet, down 21.3 per cent in August and 11.5 per cent for the first eight months of the year.

Petrol models were up 3.8 per cent last month, while alternatively fuelled vehicles rose 58.3 per cent to achieve a market share of 5.2 per cent.

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