SIMI believes that the introduction of the new dual registration system may have helped a little this year, though its benefits are not likely to be realised for a few years yet.
In case you’ve not had reason to find out what it’s all about, Ireland moved to a dual plate system this year for the first time ever, where cars sold in the first half of the year used the ‘131’ prefix (e.g. 131 D 12345) and those sold since July used ‘132’ (e.g. 132 D 12345).
Contrary to popular belief, this measure was not introduced to counteract triskaidekaphobia (the fear of the number 13), but to spread new car sales out more evenly over the year. In January 2014 the prefix will be ‘141’.
A huge amount of a new car dealer’s business is currently carried out at the start of the year. A bulk load of stock must be taken in and readied (over the holiday period) for the new registration on January 1st and the market is all but ceased by May.
It is hoped that a second plate change in July will spread the demand more, making new car sales less seasonal. The same strategy has been in operation in the UK for many years, though the plates change in March and September instead.
And has it been a success in Ireland?
Well, it’s way too early to tell. There was a spike in sales this year in July, but there was a corresponding dip the month before. It’s likely to be a few years before buyers appreciate what it all means.
We asked dealer principals and salesmen from around the country what they thought of the change. Here are a few of the responses:
- Ger in Cork: “I believe the two plate system does not work. We are in very challenging times and the two plate system has hurt sales in this country. The outlook for next year is difficult due to the lack of finance from the banks. A customer used to have a new car that lasted a year, now it is only six months.”
- Joe in Dun Laoghaire: “There might be a slight advantage funding stock as there technically should be two buying periods in Jan/March and July/August. When the system is running for three or four years we can have better feedback.”
- Gary in Tipperary: “The main benefit of the plate change will most likely not be felt until 2015 onwards and we still expect Q1 to be the busiest buying period for next year. Because of this there will still be the extra cash requirement needed to fund this business on the dealer side. This is still a major problem for the trade as many banks are slow to finance stocking.”
- John in Dublin has the last, positive, word: “Sentiment seems to be improving within the industry after a very challenging year in 2013. For the latter part of 2013 we have seen an increase in volume of used car sales on the same period in 2012, added to this the average spend on a used car has increased by circa €7,000, which is an indicator of an improvement in consumer confidence.
Consensus is certainly that it will take a few years before the effects of the change are fully felt, by which time it’s hoped that the Irish economy will have dramatically improved.
Whilst 2014 is still expected to be another challenging year we don’t expect it to be as difficult as 2013, and see a small increase in the new car market. Many customers are becoming increasingly turned into finance options such as PCP offered by the manufacturers and the focus is shifting to a monthly cost as opposed to an outright buying price.”