Irish passenger car registrations fall in March 2019
The passenger car market in Ireland has declined by 5.6% year on year (y/y) during March, according to data released by the Society of the Irish Motor Industry (SIMI) and published by beepbeep.ie. Registrations fell from 17,726 units to 16,730 units. The light commercial vehicle (LCV) market saw a further smaller decline in March of 2.2% y/y to 3,067 units; its YTD registrations have now retreated by 10.7% y/y to 11,182 units. The situation in the medium and heavy commercial vehicle (MHCV) sector again slid back and in March has dipped by 1.5% y/y to 267 units. In the YTD, MHCV registrations are now 886 units, a decline of 3.3% y/y.
Significance: The weakness in the Irish passenger car market has continued in March. SIMI has suggested that some of this is related to Brexit uncertainty, particularly given concerns over the free flow of trade with Northern Ireland and the rest of the United Kingdom, while used car imports are continuing to be a dampener, with registrations of these vehicles growing by 10% y/y to 8,970 units. However, SIMI has also pointed to the Irish government choosing against giving some VRT relief due to the move to the WLTP emissions testing regime, which has resulted in a rise of this registration tax. Brian Cooke, the director-general designate of SIMI, said, "While the VRT increases in this first phase of the transition to the WLTP test figures only saw an average increase of 5% in the CO2 values, the second phase next year will see these increasing by a further 21%." He noted that "all other Member States have followed the EU Commission view that consumers should not be faced with increased taxation due to the improved emissions testing regime". It believes that, without a change, this will further damage new car sales and will reduce state revenues. However, on a more positive note, demand for electric passenger cars has almost doubled in March to 312 units, taking its YTD result to 1,436 units, an increase of over five times compared with the first quarter of 2018. The main reason for this has been the introduction by the government of new taxation measures and other incentives to support demand since the beginning of the year.
IHS Markit now expects the Irish passenger car market to fall further during 2019, by around 0.8% y/y to 124,800 units, but then improvements will be recorded from 2020, although this is likely to depend on the outcome of the UK's departure from the EU, on which Ireland is hugely dependent. We also see declines in LCV registrations during 2019, before they start to flatten in the early part of the next decade.
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