Podcast Ep 74: Ireland’s reopening coincided with the beginning of the pivotal H2 sales season for the motor sector, says Bank of Ireland head of Motor Sector Stephen Healy.
In the first week of July the Irish car market was up 45pc on the previous year and back to pre-pandemic levels.
This is likely to settle to a more regular velocity in the course of the month, but July is likely to end 30pc higher than the previous year, predicted Healy.
“The expectation that July could be 30pc higher than last year – back to pre-pandemic levels – is encouraging”
In his latest Motor Sector News report, Healy revealed that more than 80,000 new vehicles were registered in H1 2021.
“This was an extraordinary achievement by the sector as sales were completely remote for the first four and a half months. New car sales were up 21pc year-on-year,” Healy told ThinkBusiness, pointing out that sales of new cars are running at 80pc of 2019 pre-pandemic levels.
Healy said the fact that H2 sales were up 45pc in the first week of July was a good indicator. “July is important because it makes up around 21pc of annualised sales. Typically by the end of July 90pc of new car sales are completed.
“The expectation that July could be 30pc higher than last year – back to pre-pandemic levels – is encouraging. We expect demand in H2 to be very strong for new and used cars in line with sector predictions,” Healy said.
The return of hire drive
With Ireland reopening it signals good news for the hire drive segment of the motor sector which saw car registrations collapse 85pc in 2020 because of the pandemic.
As a result, Healy explained, many car hire companies reduced their vehicle fleets to increase liquidity to keep trading.
But now there is light at the end of the tunnel. “In the first six months of 2021 hire drive registrations increased 32pc.
“However, they are still 75pc below H1 2019 levels. Many hire drive companies oversold their fleets and are now looking to increase volumes again.”
Healy added that recovery of hire drive will be dependent on the restart of international travel and an increase in tourism.”
He said the reopening of international travel in late July will be a key factor. “Hire drive companies will be monitoring tourist bookings to manage and grow their fleets.”
Does Ireland have enough electric vehicle chargers?
According to Healy’s analysis hybrid vehicles now account for 25.4pc of new passenger cars while electric vehicles (EVs) for the year-to-date are at 6.8pc of the market.
“Public chargers are needed to manage the increased demand and give consumers confidence”
Recent interviews with the local heads of Audi, BMW and Mazda all signal anxiety over Ireland’s electric vehicle charging infrastructure.
Healy said that while EV sales are rising, it will take time for the infrastructure to roll out. “It’s a great example of the saying, ‘which came first, the chicken or the egg? There has been an acceleration in EV demand since the pandemic took hold with greater choice for consumers. There are more and more EVs and plug-in hybrids with longer range.
In the first half of the year pure EVs accounted for almost 7pc of the market and plug-ins accounted for 6pc.
“Public chargers are needed to manage the increased demand and give consumers confidence.”
Healy said that in terms of at-home chargers, across the EU governments are financially incentivising the installation of wall box home chargers. He cited ESB predictions that 85pc of EV charging will be done at home and 15pc at public chargers.
“Outside the home there are 1,100 charging points across Ireland and the ESB is investing €20m in upgrading its network of chargers.”
According to the ACEA 70pc of all European charging points are in the Netherlands, France and Germany.
“Outside of Norway, these countries have some of the highest rates of EV adoption. Investments in infrastructure in these markets provides confidence to consumers when purchasing. Continued Government subsidies and grants and accelerated investment in infrastructure is vital,” said Healy.
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By John Kennedy (john.kennedy3@boi.com)
Published: 16 July 2021
