New figures show an increase in the number of used cars being imported from the UK. Paddy Comynreports
Imports of used cars from the UK look set to rise again this year as Irish consumers look to make savings on their next car. According to figures provided by The Revenue Commissioners, 50,011 used cars were registered in 2006.
This year up to the end of June, 28,765 imported used cars were registered which is an 8.8 per cent increase on the same period in 2006. In January, there was a 21 per cent increase compared to the same month in 2006. The biggest month for imports this year was May, where 5,256 used cars were registered into the State.
These figures do not account for the actual numbers of imports, with many unregistered and unsold cars sitting on dealer forecourts.
Many dealerships, both Society of the Irish Motor Industry (SIMI) and non-SIMI members are now importing cars directly from the UK for sale on retail forecourts and while this was seen as something that was damaging the industry, according to Cyril McHugh chief executive of the Society of the Irish Motor Industry, this is no longer the case. "We did see the used car market affected last year but this year, despite the increase in used car imports the used car market is very healthy.
"We don't have an issue with our members importing used cars from the UK market for sale on their forecourts as this is legitimate competition and as long as all the proper procedures are followed, the cars mileage can be verified and all the car's extras are declared," he said.
"Where we do have an issue is where some dealers might attempt to import the car as an individual rather than a dealer and thus avoid paying the requisite taxes."
The SIMI are calling on the Government to change the existing legislation to allow a VRT rebate on the export of used cars to other markets, such as the UK which would allow Ireland's surplus of used cars and its specialist cars to be sold on to a larger market competitively.
"Currently as it stands Ireland's used cars are not competitive in terms of the broader car market due to VRT and this is a gross interference on the movement of goods," he said.
"If there was a VRT refund when cars are exported we could see the creation of an export market of 15,000-20,000 cars to the UK market alone."
One such dealer that has made a business based solely on the retailing of used cars from the UK market is Autoplatz. Operating from two dealerships, one in Walkinstown Avenue, Dublin, and another in Cashel, their operation is based around the retailing of German marques such as BMW, Audi and Mercedes-Benz, the majority of which have come from the UK market. "We capitalised on a gap in the market," said Leon Wood of Autoplatz.
"Prior to us opening there was no proper dealership selling quality, nearly-new, imported German cars and we recognised the fact that about 20 per cent of the total number of cars sold in Ireland are German."
With so many cars available in the UK it not hard to understand why the cars are in such plentiful supply. "There are 6,000 franchised dealers in the UK and each of those may have up to 20 demonstrator models that change four times a year," he said.
"The mileage is guaranteed . . . and they are not only less expensive than equivalent cars offered here but they also offer better value because they are often better equipped and since they are nearly new, the initial hit of depreciation is gone from the car."
Wood estimates that there are about 10,000-15,000 unregistered UK cars on Irish forecourts and disputes the claim that the removal of VRT would make the market that much healthier.
"The removal of VRT restrictions would just give UK dealers greater access to the Irish market and they could offer much better deals. They are waiting in the wings for such a change."
Despite an increase in the numbers of imports, franchised dealers are still reporting a healthy trade.
According to John Hayes, sales manager of Audi Ireland their used car market is very healthy. "We are naturally aware of the increased number of import cars to the market but our dealers are very pleased with the amount of business being done and this is in no small part to the 'SSIA factor' too.
"Despite an increase in our new car sales of 30 per cent of late there is no surplus of used stock and we are very pleased about that," he said.