Car sales rev up in October - but recovery talk 'premature'
DEMAND for new cars grew by more than 8 per cent in Northern Ireland last month, new figures show.
Some 3,810 new vehicles were registered in October compared with 3,516 during the same month in 2017, the Society of Motor Manufacturers and Traders said.
But while the latest sales figures have been heralded as a welcome improvement, the longer-term trends remain largely unchanged.
New car sales for the first ten months of this year (47,582) are down almost 4 per cent (1,840) relative to last year, which represents the weakest sales volumes for January to October in five years and is 25 per cent below the corresponding levels in 2007.
The Volkswagen Tiguan was the north's top seller in October, followed by the Vauxhall Corsa, Ford Kuga, Volkswagen Golf and Hyundai Tucson.
Ulster Bank economist Richard Ramsey said: “Good news has been in short supply for the motor industry lately, and its encouraging that we've seen the best October sales for four years.
"Some of this recent improvement is likely to be a carry-over from sluggish sales in previous months. Indeed, the latest figures follow the quietest September in seven years.
"Car manufacturers have struggled to adapt quickly to new EU emissions standards and this has impacted on the supply of vehicles to car showrooms.
"Uncertainty surrounding Brexit is impacting on the sector too. A ‘no-deal' Brexit could significantly disrupt the supply chains of Europe's auto industry. This would affect the supply of new cars in 2019 irrespective of what demand is there."
Mr Ramsey added: "New car sales growth in Northern Ireland stalled in 2015 and 2016 and have largely gone into reverse since 2017.
“Consumers' disposable incomes have been squeezed by inflation. Rising food, motor fuel and utility bills are set to see this trend continue into 2019.
"Talk of an end to austerity, as indicated in last week's Budget, is premature. With the freeze in most working-age welfare benefits continuing and some welfare benefit cuts still to take effect, the average consumer isn't expected to see a notable improvement in their personal finances in the year ahead.
"Consumer confidence is expected to remain subdued particularly for large discretionary purchases such as a new car.”
In the UK as a whole, demand for new cars fell by 2.9 per cent in October and registrations are down 7.2 per cent this year compared with the first 10 months of last year.
SMMT chief executive Mike Hawes said: "Vehicle excise duty upheaval, regulatory changes and confusion over diesel have all made their mark on the market this year so it's good to see plug-in registrations buck the trend.
"Demand is still far from the levels needed to offset losses elsewhere, however, and is making Government's decision to remove purchase incentives even more baffling.
"We've always said that world-class ambitions require world-class incentives and, even before the cuts to the grant, those ambitions were challenging.
"We need policies that encourage rather than confuse."