April car sales figures spiral - but don't get carried away says economist
NEW car sales soared in Northern Ireland last month - but economist warn that it's no recovery.
Some 3,907 new cars were registered in April compared to 3,303 during the same month in 2017, the Society of Motor Manufacturers and Traders (SMMT) said. That's a rise of 18.3 per cent.
But so far this year, only 21,107 cars have left showrooms, which is 5.2 per cent fewer than 22,265 this time last year.
"So does this double-digit rise in car sales mark a recovery in Northern Ireland consumer confidence? In a word, no," Ulster Bank chief economist Richard Ramsey insists.
He said: "New car sales traditionally provide a useful barometer of consumer confidence, but in recent months interpreting these figures requires a degree of caution given the significant volatility in that sector.
"Tax changes, the weather and the timing of Easter have all affected the volume of new cars sold, and it can misrepresent the genuine underlying trends."
He said the underlying picture still remains one of depressed new car sales in the Northern Ireland market.
"The year-on-year rise in April is coming off a very low base in 2017, which followed the introduction of increased vehicle excise duties which had incentivised buyers to purchase vehicles in March last year rather than April, and as a result new car sales plummeted by 29 per cent that month," Mr Ramsey said.
"This looks set to be another year of falling new car sales, with volumes set to hit a five-year low. These numbers conceal winners and losers by brand, so May's figures will provide a more meaningful gauge of how consumer sentiment is faring."
In the UK as a whole, the overall new car market rose by 10.4 per cent year-on-year in April, bucking the trend for the year.
Registrations of petrol cars were up 39 per cent last month, while demand for alternatively fuelled vehicles such as hybrids and pure electrics increased by 49 per cent to take a market share of 6 per cent.
Mike Hawes, the organisation's chief executive, said it is important not to look at one month in isolation as April's year-on-year increase is "not unexpected".
He went on: "While the continuing growth in demand for plug-in and hybrid cars is positive news, the market share of these vehicles remains low and will do little to offset damaging declines elsewhere.
"Consumers need certainty about future policies towards different fuel types, including diesel, and a compelling package of incentives to deliver long-term confidence in the newest technologies."
Richard Jones, managing director of motor finance provider Black Horse, which is part of Lloyds Banking Group, said the "ongoing confusion" around fuel choice remains "a major concern".
He added: "The public policy debate on diesel has led many customers to the mistaken view that the biggest issue to be addressed in reducing emissions is the removal of diesel cars from the UK's roads.
"Rather, the most important issue is actually the more general removal of older, more polluting cars - whether petrol or diesel."