New tax rules driving up Northern Ireland car sales, says expert
March was a 10-year high for new car sales in Northern Ireland as motorists seized the opportunity to make a purchase before the introduction of sweeping tax changes, according to the latest industry figures.
There were 8,556 new cars sold locally last month, up from 7,807 in March last year, which represents a 9.6% increase and a decade-high for here.
Figures released today by the Society of Motor Manufacturers and Traders (SMMT) revealed that Ford, Volkswagen and Hyundai were the best sellers last month, with the Ford Fiesta the most popular new model sold by dealers.
Local motorists registered 286 new Ford Fiestas last month, followed closely by 235 Hyundai Tucsons and 222 Volkswagen Golfs.
Ford was the most popular brand here, with three models making the top 10 most popular list and 678 new cars sold during March, according to the SMMT figures.
Despite the increase in new car sales last month, Ulster Bank's chief economist Richard Ramsey warned the figures may drop again in the coming months as road tax changes come into force.
New Vehicle Excise Duty (VED) bands have been introduced, but the changes only apply to cars bought after April 1.
Mr Ramsey said the most recent figures may have been boosted as a result of some motorists timing their purchase to avoid the new tax structure.
In particular, anyone planning to buy a low-emission car would have had an incentive to buy before last Saturday.
Mr Ramsey said: "March was a record month for new car sales in the UK and a 10-year high in Northern Ireland.
"There were 8,556 new cars sold locally last month, just over 1,000 fewer (11%) than the pre-recession peak of 9,564 in March 2006.
"The near 10% year-on-year rise in local new car sales last month compared favourably with a UK increase of 8.5%. However, Northern Ireland's sales figures are coming off a lower base and declines recorded in earlier months.
"New VED rates came into effect on April 1, which introduces an annual flat rate charge for all cars, bar those with zero emissions, and March's figures have been flattered by some motorists bringing forward buying a new car ahead of the tax changes. We can therefore anticipate April and May's figures to be somewhat softer.
"New car sales are a key barometer of consumer confidence, but rising inflation presents an uphill challenge for consumer spending in the months ahead. We await the impact of this on retail activity and new car sales in due course."
According to the figures, there are now also more premium brands, such as Maserati, Bentley, Ferrari and Aston Martin, on the road in after last month. Jaguar also looks set for a record year, with sales up 50% year-on-year in the first quarter.