Belfast Telegraph

Northern Ireland new car sales fall 'amid election and changes in tax'

By John Mulgrew

New car sales in Northern Ireland have slumped for the second month due to sweeping tax changes and an impending general election.

Sales fell by 9.4% in May, based on the same period a year earlier. A total of 4,136 vehicles were sold.

And year-to-date sales are also down, falling by 5.8% based on the same period a year earlier, according to the Society of Motor Manufacturers and Traders (SMMT).

The slump was roughly in line with sales across the UK, which fell by 8.6%.

Many buyers brought forward purchases to March, ahead of new vehicle excise duty (VED) rates coming into force on April 1.

The top selling car was the Volkswagen Golf in May, with 140 vehicles shifted. Second place went to the Hyundai Tucson, with 132 sold. That was followed by the Nissan Qashqai, with 119 vehicles.

Across the UK, some 186,265 new cars were registered in May, down 8.5% on the same month last year.

SMMT chief executive Mike Hawes said: "We expected demand in the new car market to remain negative in the month of May due to the pull-forward to March - which was an all-time record month - resulting from VED reform.

"Added to this, the general election was always likely to give many pause for thought and affect purchasing patterns in the short term.

"Although demand has fallen, it's important to remember that the market remains at a very high level and, with a raft of new models packed with the latest low emission and connected technology coming to market this summer, we expect the market to remain strong over the year."

All new cars, except for those with zero emissions, are now subject to an annual flat rate charge.

RAC research found the vast majority of drivers buying new cars now pay significantly more following the change.

Across the UK, registrations from private and fleet buyers were down 14% and 5.3% respectively in May, while business purchases rose 20.1%.

Demand for new diesel cars dropped by 20%, while petrol rose 0.4% and alternatively fuelled vehicles were up 46.7%.

Overall registrations since January are down 0.6% compared with the same period in 2016.

And while the previous month's sales for April were one of the worst months on record for Northern Ireland, due to the tax changes, the figures should be "treated with a huge pinch of salt", according to economist Richard Ramsey.

Some 3,303 vehicles powered out of showrooms across Northern Ireland in April. That's down 29% from 4,658 during the same month a year earlier, according to the SMMT.

"However, these headlines should be treated with a huge pinch of salt," Mr Ramsey said.

"A meltdown in the new car sales market is not occurring. Instead the hefty fall is distorted by changes to vehicle excise duty.

"It is more insightful to look at the underlying trend in new car sales.

"Looking at the first four months of the year, car showrooms had their worst start to a year in four years."

Belfast Telegraph