New car registrations during the first six working days of 2016 were 43 per cent higher than the corresponding timeframe 12 months ago, with Waterford’s most experienced Principal Dealer describing the news as ‘very bullish’.
Speaking to The Munster Express during one of the busiest weeks of the year in the country’s forecourts, Tom Murphy (Volkswagen/Mercedes-Benz) stated: “The biggest feature of this, in my view, is that people now have the confidence to buy. I remember during the Waterford Crystal strike (in 1990) that people stopped buying because it wasn’t appropriate to buy cars when people were out on strike, and there was a bit of that again in the last few years.
“Customers we had that weren’t short of money didn’t feel it was appropriate to flash it but, I think, thank God, that now appears to be behind us and there appears to be more confidence. But the one thing that has come across loud and clear, and many of my colleagues are saying the same thing is that people are more cost conscious nowadays; in other words, it’s no longer a case of how quick can you can get that car for me, but how quickly can you get and now much is it going to cost me, and that’s a good thing.”
With car financing rates at zero per cent in some instances (for certain vans) and an average rate of three per cent for VW models “cheaper than any Credit Union or bank”, Tom Murphy said this “phenomenal rate” was also assisting in the upsurge.
With family reliables, top-billed by the ever popular Golf selling well once more, the industry’s 10-day new registration figures, a period which generally accounts for 50 per cent of all January car sales, will be revealed later this week.
“People can lock in at that price and you can lock in for up to five years. And on top of that, the American way of doing things, the Personal Contract Purchase (PCP), is becoming more and more popular with customers.
“So, say you come into us and you have €300 a month to spend, we can work out a deal where you spend €300 a month, and at the end of three years, you can walk away and hand back the car; that is, handing back the car in line with what’s expected as reputable condition after three years of motoring.”
Mr Murphy added: “Certainly since the downturn, people like to know, right this is what the car will cost me for three years, I’ve a three-year warranty, a three-year service plan, it’s costing me ‘X’ amount a month, and the only surprise money wise I might have to pay would be in a set of tyres. There’s been a huge shift towards that model and I would say almost 50 per cent of the smaller family cars that we’re selling are through PCP, with people happy to change their car through this system after three years. We’ve an industry in Europe which can manufacture up to 25 million cars per year and is typically selling up to 15 million so it’s hugely competitive and manufacturers can turn out cars nearly as quickly as Dermot Walsh turns out his blaas
“The first cost in the car business is in the first million cars and after that they start to make profit, and it’s the same for all manufacturers; to produce another 1,000 cars once you’ve got beyond that first million, it’s not that much of an undertaking in terms of cost to the manufacturer, but that’s how competitive things are.”
Incidentally, the Volkswagen emissions controversy which broke in the United States last year has proven “irrelevant” to new VW registrations in Waterford, Tom Murphy revealed, in what was his first public comment on the issue.
“All of this stuff was political; after all, Volkswagen is the number one selling car in Ireland and Europe again this year. If America had its way, they’d have nothing in their forecourts but American cars, but in the past 10 years, two of its three major manufacturers have been bailed out by the government there…
“This entire episode was blown entirely out of proportion, like Audis 25 years ago that were supposed to be jumping, and in the last few months again, Opels that were going on fire, but this Volkswagen issue was, in my view, an entirely political issue, a total storm in a teacup. Of course there are bound to be issues when, in the case of Volkswagen, Toyota and General Motors, which are producing 10 million models a year each, you will never cover absolutely everything, but the whole matter was blown entirely out of proportion and that was all down to politics.
As for what 2016 holds in store for the market, Tom Murphy estimates that between 160,000 and 170,000 new registrations is eminently achievable, given that there are now two million people working in the State, the highest figure since 2007.
“Seventeen years ago, when there was approximately 1.7 million people at work, there were 150,000 cars being sold, so when you consider that there’s another 300,000 people at work now than there was then, I’d suggest registrations will be higher than what was initially suggested…and, as I’ve already said, it’s not shameful to have a new car now; customers feel the time is right to buy a new car.
“There’s a lot of pent-up demand, not only in cars, but when it comes to goods such as domestic appliances. It’s worth noting that we’ve more cars that are 10 years or older on the road in Ireland than we’ve ever had before, so that to me certainly suggests a pent-up demand within the market.”
