Vehicle sales at five-year low - but Northern Ireland avoids total car crash
THE number of brand new vehicles taking to the roads in Northern Ireland is at a five-year low, dipping by 3.35 per cent over the whole of 2018.
But the region has still avoided the car crash scenario of Britain, where plummeting diesel sales, new emissions rules and a Brexit-linked knock to consumer confidence led to a decline of nearly 7 per cent, the biggest annual drop since 2008.
Showrooms in the north sold 1,698 new cars last month, down 5.7 per cent year-on-year and the quietest December in six years, according to the Society of Motor Manufacturers and Traders (SMMT).
In the year as a whole, 52,533 cars vroomed away from forecourts in the north compared to 54,356 in 2017.
It was the worst trading performance since 2013, when 52,460 cars were newly-registered.
That is more than 16,000 shy (or roughly 24 per cent) of the record-breaking total of 68,708 at the height of the economic boom period of 2007.
And according to Ulster Bank's regional chief economist Richard Ramsey, a further decline is likely this year.
"I expect the trend in falling new car sales to continue," he said.
"Despite an easing in inflationary pressures and wage growth exceeding the rate of inflation, the improvements in consumers’ disposable incomes are marginal.
"Consumer confidence remains in short supply and will continue to weigh on big-ticket discretionary purchases in 2019."
He added: "The recovery in sales volumes in Northern Ireland has been less pronounced than in the UK as a whole.
"While UK car sales recovered from the recession with sales volumes hitting a record high in 2016, growth stalled in Northern Ireland in 2015 and 2016 and went into reverse since 2017. During the last two years new car sales have fallen by more than 8 per cent, or 4,791 fewer vehicle sales."
SMMT chief executive Mike Hawes described 2018 as "highly turbulent", but insisted sales were "on a par" with the average over the past 10 to 15 years.
He warned that a drop in consumer confidence linked to Brexit, concern about diesels and the impact of a new testing regime are all having a negative effect on the market.
"The challenges before us are something of a perfect storm," Mr Hawes said.
"It's causing considerable worry and agitation across boardrooms both in the UK and abroad."
He said it would be "unfair" to attribute the entire drop in demand to fears over the UK's withdrawal from the EU, but explained that falling consumer confidence has reduced people's inclination to make a "big ticket purchase".
A no-deal Brexit would be a "catastrophe for the industry", according to Mr Hawes, who stated that Theresa May's agreement with the EU is "not a perfect deal" but would provide the transition period the automotive sector needs.
The "lingering sense of uncertainty" around how diesel cars will be taxed and treated is also affecting the total number of cars being sold, Mr Hawes said.
Demand for diesels sank by 30 per cent last year.
Some diesel car owners are switching to petrol (up 9 per cent) or alternatively fuelled vehicles (up 21 per cent) such as plug-in hybrids or pure electrics, but the majority are holding on to their existing cars, SMMT figures show.
The falling market share of diesel cars - which produce less CO2 than petrol models - is making it harder for manufacturers to meet EU targets on cutting CO2 by 2021.
The average amount emitted by new cars in the UK in 2018 rose by around 3 per cent year-on-year.
Mr Hawes claimed the Government's decision to slash grants for new low-emission cars in October "doesn't really send the sign to the consumer that these are the right vehicles to be bought".
:: Recent new car registrations in Northern Ireland:
:: Top-selling models in Northern Ireland in 2018:
1 Ford Fiesta 1,804
2 Ford Kuga 1,490
3 Volkswagen Golf 1,4,85
4 Hyundai Tucson 1,327
5 Nissan Qashqai 1,287
6 Ford Focus 1,197
7 Volkswagen Polo 1,124
8 Kia Sportage 963
9 Volkswagen Tiguan 950
10 Renault Captur 790