Car Imports
Agnes Aug 15 in Motor Tags: Cars Diesel Imports

The impact of increasing used car Imports on new car sales


The number of imported vehicles from the UK continues to rise but what impact is it having on new car sales here asks Geraldine Herbert

 

Used Car Imports

Spending on used car imports has more than doubled during the first half of 2017 as buyers look to the UK and Northern Ireland for bargains. In the first six months of this year 46,004 cars were imported, which represented an increase of 41% compared to the first half of 2016. If the trend continues more than 90,000 imported vehicles will be brought into Ireland by the end of the year. This compares to 72,000 last year.Car Sales Increasing

While there is a clear correlation between a drop in sterling and an increase in used car imports, the figures from the past decade suggest there is always a core market in Ireland for UK used cars irrespective of prevailing market conditions or the price of sterling.
Imports reached a peak in 2008 when over 64,000 used cars were imported. By 2010 the figure had dropped to 40,000 and remained at this level over the next five years.

The latest official sales figures show new car registration are down by slightly more than 10% (90,893 units) for the first six months of the year compared 2016 (101,265 units). That’s 10,375 fewer cars registered in the period. Similarly, new commercial vehicles were down 14% (18,889 units) compared with 2016 (21,966 units).

Car ImportsSo how much is the drop in car sales the result of an increase in imports?  According to figures compiled by Motorcheck.ie nearly half (49%) of all imported used cars during this period were five years or older so the increase should not be adversely affecting the new car market. However, 7,000 one and two year old cars were imported this year along with 8,000 three year old units.

CSO data suggests that Irish buyers are opting for premium brands in the UK over more mainstream models available here. Audi, BMW and Mercedes-Benz all appear in the top ten car makes imported whereas none are represented in the top five new cars makes sold in Ireland and only Audi appears in the top ten list, at position 10.

 

New Car Sales

New cars sales have increased steadily over the last three years and the growth of 30% plus year-on-year may have brought the industry back to pre-2008 levels but it was unlikely to be sustainable. There is also a shortage of five year old and older used cars available and imports are filling that vacuum.

However consumers opting to import need to be vigilant. According to a recent report from automotive data experts Cap HPI, UK motor dealers are concerned that ‘clocking’ of used cars is becoming increasingly common and estimate there has been a 25% rise in the number of cars showing mileage discrepancies.


Rise of Diesel Cars

Diesel CarsAnother concern regarding the increase of imports is the rise in diesel cars on our roads. Diesel cars account for 79% of all used car imports.  

Diesel car sales in the UK have been hit hard and suffered an 11% drop this year.  This is likely to result in an increase of cheap diesel cars being offloaded here.   The drop in sales has already begun to weaken resale values in the UK.  With the rise of health concerns, the risk of higher taxes and a host of anti-pollution penalties for taking older diesels into many town centres, British motorists are increasingly turning away from diesel.

New car sales may be down slightly and while there is no denying the impact of used car imports, strong employment growth and increasing wages means more cars on the road and that in turn has a positive impact on the service and maintenance side for car dealers.

In addition, the market for used vehicles is strong and balances much of the fallout from the downturn in the sale of new vehicles.
Brexit

Looking ahead to what impact the final Brexit deal will have on car sales here is yet to be seen. Many predict that an increase in car costs is likely for the UK due to tariffs and taxes that maybe equivalent to more than 10% per vehicle. The attraction of UK cars has always been that buyers can avail of lower prices and tax rates so even when vehicle registration tax (VRT) is taken into consideration, cars can be bought at a much lower cost. However, in the long term bringing a car in from a Non EU Country will not afford the same benefits so this may actually turn out to be positive for the Irish car market.

 

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