“Business Looks Good, but beware of Brexit”

Tom Murphy: 2018 set to be a good year for the motor trade

Business levels across the country’s showrooms in 2018 are expected to be slightly up on the new registrations recorded last year: that’s the prediction veteran motor dealer Tom Murphy made to The Munster Express on Wednesday last.
Mr Murphy, now in his 50th year in the motor trade, did strike a cautionary note about the year ahead – and beyond that – given the great unknown which Brexit and its aftermath continues to represent.
“Brexit is an issue for two reasons,” he explained. “Firstly, there’s the huge uncertainty about it all but the biggest problem is the value of sterling has impacted on the amount of UK cars that have come into Ireland (there were only 79 new cars important nationally last year) but all that has done effectively, is to reduce the value of the cars of, say, ‘Mr and Mrs Browne in Suburbia’. The two to three-year-old car that they have is worth less than the same car two or three years ago because what you have now is a right hand drive European price so if somebody can land a three-year-old car of any kind, that’s the price of it, whether it comes from Manchester or Mullingar.”

Tom Murphy has 50 years of professional experience in the motor trade to draw from.

Tom Murphy has 50 years of professional experience in the motor trade to draw from.

Reflecting on last year’s low import total, Tom Murphy added: “Our bare metal price in Ireland is as good as it gets but what happens us here is you get VRT and VAT heaped on top of that. You could nearly divide in two the retail price – so if a car was €50,000, its bare metal price is about €25,000, and then you start adding on the VAT and the VRT and you’re back to where you started.”
As for trade levels at present, and drawing from a half century of knowhow, Tom Murphy said that he and his fellow traders in Waterford are dependant on “the ordinary man and woman on the street who keep all of us going. We depend on them”.
He added: “We’ve got an obligation to the ordinary man and woman on the street to try and treat them fairly, because that’s who comes back to us every two or three years. The ordinary customer has been impacted by the importation of cars – importation has levelled the price of cars and reduced the price of certain cars in the car park.”

Keeping that commitment to customers in mind, Tom Murphy feels that customers “are now more into usage”.
He continued: “We find that, even with brand new cars, that people don’t want to own them anymore. They want to know how much a month is this going to cost them. They want to know that it’s going to cost ‘X’ amount of Euros and I walk away at the end of three years and I change the car, I upgrade the car or I keep the car, as the case might be, and this is a trend we’ve noticed developing over the past four to five years. Now this has been the case in the American car business for as long as I can remember when it comes to usage; nearly every car ad that you see nowadays, let it be on TV, the newspapers, Facebook and so on, it’s all about what the car will cost you per month. That’s what people are into and the reason for that is that people can budget: if you get a new car with a three-year warranty, you can say, right, well the Road Tax is going to be so much and the insurance is going to be so much and I know I’ll be putting a set of tyres on the car in due course – but other than that, I’m going to paying, say, €350 a month – and I had it back at the end of the lease period, and there’s a huge level of that in business nowadays.”

Tom Murphy said there’s a tendency for elements of the public to be “obsessed with Road Tax, despite the fact that Road Tax is relatively cheap in comparison to what it used to be, given that it is now based on CO2 emissions – and it has rightly encouraged customers to go with more eco-friendly motor cars”.
As a former President of the Society of the Irish Motor Industry (SIMI), adding that he feels he can speak “for all of the industry” when it comes to comparisons and contrasts, Tom Murphy said that in terms of emission/CO2 levels, 10 average new family cars sold today are the equivalent of one new family car sold 12 years ago. ”

But he remains enormously sceptical about the environmental bona fides of certain hybrid and electric vehicles which several EU governments have declared the only way forward for both public and private vehicle use.
“In 2016, there were 82 million cars registered in the world,” Tom Murphy told me. “And the amount of hybrids and electric cars among that total, even when combined, was totally insignificant. In the case of electric cars, it was less than half of one per cent. In Ireland last year, there were roughly 134,000 new cars registered, and of that 134,000, only 650 were electric. Let me put it like this: maybe The Munster Express or some other news organisations in town should say that they’re going to get Ford, Fiat or Volkswagen to give 100 electric cars away in a raffle for them – and I’d say that all 100 would be immobile after a week because there are so few places where electric cars can be charged. There is no meaningful infrastructure to charge electric cars.”
Tom Murphy added: “I was speaking to a colleague of mine who goes to England before Christmas every year, for the Pillar (horse race) meeting in Cheltenham and his brother-in-law had just bought an all electric car and he was showing it off to everyone. Well, he drove up to Cheltenham in it and then had to leave it behind him because he couldn’t get a charge in Cheltenham so he had to send up a tow-truck to bring it home. I know I am biased given my own background, but these cars still don’t have the range they need to appeal to a meaningful number of customers, and, as I said already, where are the power points for them? The infrastructure doesn’t exist, and the batteries that go into these cars are so environmentally unfriendly, it’s not true.”

For more see the Motoring Supplement in this week’es print edition of The Munster Express newspaper

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