It's not just gelled-hair smoothly-clad city traders who follow currencies in the hope a windfall. With the euro slightly stronger, the yen somewhat weaker and new car sales falling off, some dealers are wondering if it's time to start importing second-hand cars again in greater numbers. Catherine Cronin reports.
Many entrepreneurs made their money on used Japanese imports in the late 1980s and again in the late 1990s. With less money floating around, used cars were often the preferred buy: the yen was weak and it made sense for importers to go east to auctions, pick up used cars and ship them home.
While there were occasional horror stories, such as the lack of proper rust protection or some service hassles, a lot of Japanese imports served their purposes. They were often the second car in a house. Many learned to drive in them and taxi drivers are still pounding around in them.
An import was one of the few ways a boy racer could get his souped-up or specialist Honda, Subaru or Toyota on a budget before the insurance companies enticed him to opt for blacked-out Fiat Puntos instead.
Some customers wanted only Japanese imports as they generally had a higher specification than models sold here. Once bought, people tended to hold on to them. They are generally driven to the ground, said one dealer. Garages could be slow to take them in a trade-in without full-service history.
At the height of the Celtic Tiger spending spree, second-hand cars became almost passé, which obviously had an effect on used imports. In 1999, nearly 38,000 used cars were brought in, mostly from other right-hand drive countries such as Britain and Japan, but by the end of last year the number was as low as 13,000. The number of Japanese imports fell hugely, helped along by a more expensive yen.
Although some used-car dealers see signs of a pick-up, it's still thought that the number of Japanese imports averages at about 500 a month. One importer/distributor, Hi-Grade Imports, says it brings in between 100 and 150 a month. Among the models are Micra, Starlet, Civic, Isuzu, Prado (the domestic version of the Toyota Landcruiser), Pajero and Terrano, as well as MPVs such as Serena and Emina (Previa).
In the past customers could go directly to Dublin port in the hope of finding a bargain, but the few cars which might be sold there do not come with a warranty and this is reflected in the price.
Merlin Car Auctions was a major seller of Japanese used imports in the past but has held only two auctions of these imports so far this year, 50 cars in total. They included CRVs, Preludes, Pajeros, Previas and some Micras.
In contrast the demand for used Japanese imports is much better in Britain, a much larger market with a stronger currency. Auctions are held once a week in Southampton and it's more profitable for Irish importers to send large luxury cars, such as the Toyota Soarer, directly there.
Mike Reidy of Reidys, Patrickswell, Co Limerick believes that there is a market for niche imports such as sports Jeeps and MPVs, especially those that are difficult to get second-hand here. "What's attractive is the likes of a six-year-old Pajero with 50,000 miles in good condition and ranging from €12,000 to €15,000," says Reidy.
Galway Daewoo is hedging its bets on used MPV imports which dominate its second-hand car sales. It argues that very little is available in good second-hand MPVs for less than €20,000, and tries to meet the need with low-mileage Japanese imports.
"You must have access to the right cars and ensure that what you bring in is clean, good and well-priced," says Adrian Halloran. "We regard it as safe stock and we are not caught with it. We spend time on them and service them.
"An odd Celica sells but the main interest seems to be in seven-seaters, especially for families given the need for everyone in the car to belt up from the end of July."
As part of the deal, Galway Daewoo offers a six-month warranty and puts cars through the NCT. A 1996 Toyota Emina 2.2L Turbo Diesel with 50,000 miles retails for €14,000 and includes extras such as ABS, air conditioning, power steering and airbags - 1996 Nissan Serenas with 2L Turbo diesel engines and Mitsubishi Spacewagons with 50,000 miles retail for €12,000.
Autocity says that in terms of smaller cars, demand is for the automatic Micra, some Honda Civics and Mazda Mx5s, but interest for the most part is in 4x4s and MPVs. It sees very little demand for imported saloons as there's no shortage of second-hand saloons on forecourts already.
This seems consistent with the Revenue Commissioners VRT figures, which suggest that customers buying imported used cars are going for bigger engines.
In fact, VRT is probably the main speed bump when buying imported used cars. The Revenue Commissioners value each car on engine size, mileage, make and model, as well as age and condition. It then applies the appropriate rate of VRT.
"Sometimes dealers are not happy with the open market value, saying the car isn't worth that," says a Revenue spokesperson. "What they want to sell the car for is up to them, but we have to calculate an open market value which is reasonable based on our research - though they can appeal."
So for importers, dealers and customers, it's a case of having the slide rule out. Dealers have to pay VAT at 21 per cent and customs duty of 10 per cent on cars imported from outside the EU. Then, of course, the prudent buyer has to subject the import to the rigorous inspections that all second-hand cars should get, compare the price to that of an equivalent second-hand model here, satisfy themselves on servicing and take a look at depreciation.
Will the heady days of imports return? "Well, there seems to be a shortage of used people carriers and 4x4s, so the door is edging slightly ajar," says one former importer. "Apart from that, it may be difficult until the surplus of other second-hand cars on the market falls further - or the yen weakens further."