Podcast Ep 51: Ireland’s motor industry has adapted well to the challenges of Covid-19, embracing new digital tools and ways of selling, says the head of Motor Sector at Bank of Ireland Stephen Healy.
According to the most recent Motor Sector News bulletin from Bank of Ireland’s head of Motor Sector Stephen Healy, the sector has made good use of new digital measures to engage with consumers, moving from click and collect to “click and deliver” measures in a very short period.
A 2pc VAT reduction that expired at the end of February played an instrumental role in driving new car registrations up 6.7pc while new van registrations were up 53pc as companies upgrade or replace fleets.
“Many deals are being struck remotely, funds are transferred electronically and car finance is arranged and contracts signed digitally”
Overall car sales for the year-to-date were down 10.6pc while new van sales were up 6.7pc. This compares starkly with the UK where new car sales fell 40pc and Europe where new car sales fell 24pc in January. In Spain new car sales plummeted by 50pc (in January).
“So all things considered, the Republic of Ireland’s performance is showing the resilience of Irish dealers to adapt.”
Digital commerce helps sector stick to road
Many dealers also kept their businesses alive through spare parts, body repairs and servicing as they are still permitted to remain open to the public for vehicle maintenance during level 5 restrictions.
The impact of Brexit was also felt in the form of imports from the UK falling 5pc in February. “The used imports process is more complex and costly now for private consumers with tariffs and VAT. Imports are likely to continue to fall throughout the year.”
Healy said that he expects pent up demand for new and used car as Ireland eventually emerges from lockdown because many people have been saving. “This augers well for new car sales as restrictions are relaxed.”
The digital transformation of Ireland’s motoring sector was evidenced by dealers upgrading their websites to promote car stock and many dealers would engage with customers sending videos over platforms like WhatsApp.
“Many deals are being struck remotely, funds are transferred electronically and car finance is arranged and contracts signed digitally. Your new car gets delivered to your door and your trade-in is taken away.”
His advice to prospective buyers: “Don’t delay, used cars are in strong demand.”
An electrical storm is on the way
As electric cars gather momentum on Irish roads, Healy discussed the likely power brokers in the next chapter of motoring history as speculation about Apple enters the car business continues and new Chinese brands gradually enter the EU market.
“Apple has a long road ahead. Tesla turned its first financial year profit in 2020 since being established in 2003. Apple has resources to develop electric vehicles, however established brands have the jump start on them. German, French and Japanese brands have many years of R&D under their belts and new models are arriving.
“Change will take time. There are 2.2m cars on the road in Ireland, out of which just 15,000 are electric vehicles. It will take many years to replace the fleet.”
Noting developments such as Volvo pledging to have its entire fleet electric by 2030 and all sold online, Healy said the market potential could be huge if Apple were to get its pricing and cost base right.
Other changes are afoot as Chinese brands hit the road running. MG, which is owned by Chinese giant SIAC, has launched an electric car in the Irish market this year while the largest vehicle producer in China, BYD, is launching this year in Norway. “BYD has been selling buses in Europe for many years, it is now setting its sights on the electric car market.
“It will be interesting to see how it all looks in 10 years’ time. The one guarantee is change as the sector repositions itself in terms of distribution modes, digital engagement and achieving net zero carbon emissions by producing more electric and hybrid options for consumers,” Healy said.
By John Kennedy (john.kennedy3@boi.com)
Published: 17 March 2021
