Sales of new cars improve in Northern Ireland as supply chain disruption eases
But industry braces for impact of higher interest rates and cost-of-living crisis
SALES of new cars in the north picked up last month as supply chain disruption continued to ease.
The 2,973 new cars registered in Northern Ireland during November marked a 3.8 per cent increase on the 2,524 from 2021, according to the Society of Motor Manufacturers and Traders.
It takes the industry to 36,699 sales for the first 11 months of 2022, 17.8 per cent higher than the same period last year, but 26 per cent lower than pre-pandemic levels of 2019.
Ulster Bank’s chief economist Richard Ramsey said the latest data could indicate more about the easing of supply chain issues rather than consumer confidence, which has been hit by the cost-of-living crisis and higher interest rates.
“The prospect of a global recession and weaker demand should lead to further improvements in the automotive supply chains in 2023,” he said.
But the economist predicted that rising interest rates after nearly 14 years of near record lows will herald a change across the industry, particularly in the case of more up market motors and the recent trend for car leasing and personal contract purchasing (PCP).
“Motorists, like homeowners rolling off relatively cheap fixed-rate mortgages, will discover that renewing their PCP deals will be much more expensive than before.
“Downsizing for a ‘lesser’ vehicle or switching to a second-hand car will be the undesirable choice facing many motorists.”
He said average price of a new car in the UK is also up 6.9 per cent over the year to October 2022.
“Following the global financial crisis and cost-of-living crisis that followed, motorists downsized their cars to smaller, cheaper more fuel efficient models,” said Mr Ramsey.
“The car industry duly obliged by providing a wide range of cars (particularly SUVs) to fit everyone’s budget.
“We may see a similar development during this cost-of-living crisis, particularly in relation to smaller electric vehicles.
“However, whilst cheaper to run these are much more expensive to buy. And, there isn’t the low interest rate environment that supported motorists through the previous and more modest cost-of-living crisis relative to the current model.”
Top 10 new car registrations in Northern Ireland
1 NISSAN QASHQAI (104)
2 FORD FIESTA (100)
3 VOLKSWAGEN T-ROC (90)
4 FORD PUMA (89)
5 KIA SPORTAGE (84)
6 VAUXHALL MOKKA (84)
7 HYUNDAI TUCSON (72)
8 TOYOTA YARIS (66)
9 DACIA SANDERO (60)
10 RENAULT CAPTUR (53)