Old gems: the sale of used cars could reignite the market

WITH new car sales in virtual freefall main dealerships around the country are depending heavily on a welcome upsurge in interest in the used car market to maintain jobs and cashflow until January.

So far the year has been a disaster for the motor industry with new car sales down by 63 per cent – 55,136 sales to date, compared to 149,059 for the January – September 2008 period. Hopes for an end of year figure of 60,000 are fading and the bigger worry is that 2010 could be a repeat disaster that has cost the industry heavily and seen a loss of 10,000 since January last.

The financial director of the Society of the Irish Motor Industry, Brian Cooke, has issued a stark warning to the government that, if as anticipated there is no pick-up in the first quarter next year, a further 8,000 – 10,000 jobs will be lost. The warning comes as the SIMI calls on the government to introduce a scrappage scheme to be introduced from January to stimulate new car sales.

Cooke points out that a scrappage scheme would generate huge revenue for the government from increased VAT and VRT returns at a time when it is looking around for ways to generate extra cash. Also it would remove old bangers from use and thereby reduce C02 emissions which would help the country reach our Kyoto targets. It would also protect the dwindling number of jobs which remain in the industry. He claims the figure is now down to 35,000.

Scrappage schemes work well. It was a success here in the past, the UK has extended its scheme and in Germany it is estimated that it gave new car sales a 30 per cent boost and helped the country out of recession.

The industry has been supporting thousands of jobs on just a trickle of business in the new car sector helped by big discounting on some petrol models and good prices on run-out family models due to be replaced next year. Keeping many garages ticking over is the improved trade in used models registered in the past three years. Some garages are even advertising for good used second-hand models.

Imported used car registrations are down 33 per cent on September 2008 but with the rise of the Euro against Sterling there are fears that this trade may pick up again. During September 3,428 used cars have been imported. From January to September last year the figure was 42,285 units.

Light commercial vehicle sales have also been hit and Cooke says that it is imperative that a scrappage scheme is introduced. Without such an initiative employment levels will collapse, he predicts.

Top seller for new cars for September was Ford which holds over 14 per cent of the market.