New car figures hit by 5% slump in past year
New car registrations in Northern Ireland - one of the most accurate indicators of consumer sentiment - are down 5% on a year earlier, latest figures show.
The Society of Motor Manufacturers and Traders (SMMT) said there were 3,377 new car registrations in April, a drop of nearly 5.4% from 3,569 a year earlier.
In the year so far, there have been 19,325 car sales, compared to 19,760 the year before, a drop of 2.2%.
Northern Ireland was the only UK region to suffer a fall in new car registrations with Scotland and Wales experiencing increases of 5.6% and 1% respectively.
Among those shelling out for new sets of wheels in Northern Ireland, the most popular car was the Ford Focus, while Vauxhall and Volkswagen boast two models each in the top 10 countdown.
Ulster Bank chief economist Richard Ramsey said: "After the purchase of a house or home, a new car represents the most significant expenditure item that an individual or household will make.
"Therefore trends in new car sales provide a key barometer for consumer spending and consumer confidence.
"Given the squeeze on household incomes from rising taxes, inflation (particularly petrol, food and utility bills) and pay freezes or cuts, discretionary expenditure on everything from retail and leisure (including pubs and restaurants) to transport are increasingly coming under the financial microscope of consumers.
"It is therefore not surprising that against this background, new car sales in Northern Ireland are continuing to fall, albeit marginally."
Mr Ramsey said there had been 46,794 new car sales in Northern Ireland in the year to April 2012, a new low and nearly a third down from the peak in 2007, when there were 68,708 sales.
But the economist said economy was becoming as much a badge of pride as extravagance in the pre-credit crunch era as people adopt thrifty habits such as downshifting to cheaper supermarkets and cars alike.
"During the consumer and property boom of 2006/07 there was pressure to keep up with the Joneses," said Mr Ramsey.
"Equally, during the recession, it is becoming increasingly popular and essentially to keep up with the Joneses in the fiscal austerity stakes too.
"As with food shopping, we are also likely to see a downshifting in brands to cheaper brands.
"As a result, we should see more motorists switching from premium cars to lower brands - for example, Audi to VW, VW to Seat, Seat to Skoda etc."
Number of cars sold in Northern Ireland in past year. Down from 19,760 in previous 12 months