| 15.4°C Belfast

Worst June on record for NI car sales as market begins to get back in gear

Ford Focus

New car sales figures in Northern Ireland last month were more than 20 times higher than in May but they still marked the worst June on record an economist has said.

According to the Society of Motor Manufacturers and Traders' (SMMT) car dealerships here sold 3,278 new vehicles in June, a substantial rise on the 144 sold during May.

The sharp increase is due to the reopening of car showrooms during the second week in June, however new registrations were still down, by 36.6%, compared to the same period last year when 5,170 new cars were purchased in NI, making it the worst ever sales figures for the month of June since SMMT records began.

The top 10 new cars sold last month in Northern Ireland were the Ford Focus, Renault Captur, Renault Kadjar, Nissan Qashqai, Volkswagen Golf, Polo and Tiguan and the Ford Fiesta, Hyundai Tucson and Seat Leon.

Collectively the latter car marques made up 21% of NI's 3,278 car sales in June.

NI's car sales figures compared favourably to other regions of the UK where some dealerships faced a 54% drop in sales compared to last June.

Scotland fared worse followed by Wales which saw car sales drop by 38%.

England came out best with new car sales down by 33% compared to last June.

Richard Ramsey, chief economist at Ulster Bank said had car showrooms opened at the beginning of June, the year-on-year decline may have been lower but he still anticipates a rough year ahead for the motor trade.

He said: "Clearly with the showrooms only opening on June 8, there were five fewer trading days last month relative to June 2019. Adjusting for the number of trading days reduces the year-on-year decline from 37% to 21%.

"2020 looks set to be the sixth successive year of flat or falling new car sales with 2014 being the last time Northern Ireland dealers posted a meaningful increase in sales. There is very little sign of pent-up demand for new cars."

He added: "One factor that may be holding back some demand concerns expectations for a VAT cut or 'cash for clunkers' scheme. Both of these temporary measures were introduced following the last recession. It remains to be seen what stimulus measures the Chancellor announces with his Economic Statement on Wednesday."

Looking at post Covid-19 car sales, Mr Ramsey said: "During the last recession the car market saw financially constrained consumers shift towards smaller vehicles but maintained loyalty towards the more prestige brands in the market. It will be interesting to see how consumer behaviours will evolve post-lockdown. Already we have seen sales of bicycles surge and the acceleration of the working from home trend. Consumers' transport needs and motoring requirements could well be very different to what they were a few months ago. And this is before the financial implications of the current recession are taken into account."

Speaking to Belfast Telegraph as showrooms opened last month Isaac Agnew managing director Yuile Magee said he believed car manufacturers would introduce incentive schemes to boost sales. "Initially there will be pent-up demand, which we will meet, but by August, September or October things will be more clear for the long-term picture.

"They (the manufacturers) will need to find market share and homes for the cars they are producing.

"In 2009 after the crash we had a really good year because of the offers manufacturers came up with, so who knows."

Referencing new safety measures involved in purchasing a car today including sanitisation and lone test drives, Mr Magee said the new era is the biggest change in how cars have been sold in his 40 years in the industry.

Belfast Telegraph