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The Irish Motor Industry - an Economic review Q2 2014

T
Teresa Noone

The document provides an overview of the Irish motor industry in the first half of 2014. It notes that new car registrations increased 23.4% year-over-year in H1 2014. Employment in the motor trade is also up. However, the industry remains cautious about the recovery due to its fragility. The document also highlights issues like the aging car fleet in Ireland and the impact of budget 2015 on motoring taxes. In the first half of 2014 alone, the motor industry contributed over 629 million to the Irish exchequer.

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WELCOME SIMI MOTOR industry review IN ASSOCIATION WITH DONEDEAL #MotorIndustryReview
James BrookS SIMI PRESIDENT md of kia motors ireland
industry in recovery First president to preside over a car market of 90,000 since 2008.
Car Safety 1.2m cars tested last yr out of car parc of 1.9m 53% failed - 621,000 4,300 failed dangerously HOW MANY WERE NOT TESTED?
increase in tests 754,000 cars tested so far this yr out of car parc of 1.9m 51% failed - 382,000 2,700 failed dangerously Why are there more cars being tested? Continuous Road Tax Increased NCT capacity New 5 Penalty points offence
Why is this relevant to this morning?
alan nolan director general SIMI
2014 significant year for the motor industry First significant upward trend since 08 Suggests upward trend going forward 2nd yr of dual reg system july 1st best since 2nd jan 08 month may be best since 08 may be best july ever if trend continues 14 best yr since 08?
But industry cautious cautious even talking about progress & potential to grow to 100k next yr conscious of fragility of recovery conscious of potential for any negative factor to set us back
SIMI Member Survey q2 (june) over 60% confident about: outlook for own business outlook for industry positive but less than March (70%) moving toward budget time - impacting? ! potential for any increase in motoring taxes to derail recovery
state gains from recovery in industry increased tax income gains in job creation - thousands of extra jobs in 400 towns - increase in apprentices confidence tax rev. & employment growth next yr. if no negative impact in budget
focus on fleet renewal may be necessary next yr average car will be +10 yrs long argued for well focused incentives to renew ageing fleet Environmental, safety, exchequer + employment benefits far more creative & rewarding way to seek increased tax rev. but thats for another day
q2 review - whats new? new data streams added interesting data on used car volumes - through garages - sales & trade-ins - by county - for first 6 months - growth of 17% survey - topics important to members - condition of ageing fleet - activities of black economy
Cathal creman commercial manager Donedeal
Jim Power report author Jim power economics limited
Economic & Motor Industry Update Q2 2014 Jim Power July 15th 2014
KEY ECONOMIC DEVELOPMENTS IN 2014 International recovery better but fragile Significant growth in Q1 GDP +4.1% Retail Sales Volume +7% Value +4.8% (J-May) Retail Sales Ex-Cars Volume +3.3% Value +1.4% Merchandise Exports (J-M) +0.3% Food +10.7% Chemicals -1% Live Register <400K Unemployment 11.6% Exchequer finances improving Credit conditions still challenging Housing market improving Consumer confidence stronger Successful exit from Troika
Q1 ECONOMIC ACTIVITY % QoQ % YoY GDP +2.7% +4.1% GNP +0.5% +3.1% Consumption -0.1% +0.2% Gov. Expenditure -2.1% +2.6% Investment -8.1% +2.9% Exports Goods & Services +1.8% +7.4% Imports Goods & Services +0.8% +5.9%
HOW REAL IS THE RECOVERY? THE EVIDENCE Modest recovery in retail sales, car sales very strong Labour market improving Exports still very volatile patent issue very distorting Manufacturing output strong Housing market improving Exchequer deficit falling tax revenues rising Troika exit and bond sales Business insolvencies declining Business & consumer confidence very strong External view very positive Many indicators moving in right direction Many challenges to work through
EMPLOYMENT (S/A 000S) (000s) 1800 1900 2000 2100 2200 2004Q1 2004Q4 2005Q3 2006Q2 2007Q1 2007Q4 2008Q3 2009Q2 2010Q1 2010Q4 2011Q3 2012Q2 2013Q1 2013Q4
CONSUMER CONFIDENCE 0 27.5 55 82.5 110 Mar-足05 Jul-足05 Nov-足05 Mar-足06 Jul-足06 Nov-足06 Mar-足07 Jul-足07 Nov-足07 Mar-足08 Jul-足08 Nov-足08 Mar-足09 Jul-足09 Nov-足09 Mar-足10 Jul-足10 Nov-足10 Mar-足11 Jul-足11 Nov-足11 Mar-足12 Jul-足12 Nov-足12 Mar-足13 Jul-足13 Nov-足13 Mar-足14
PERSONAL DISPOSABLE INCOME bln 60 72.5 85 97.5 110 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
THE MOTOR INDUSTRY H1 2014 New private cars registered +23.4% Light Commercial Vehicles +36.3% Heavy Commercial Vehicles +45% Every county reported good growth in new car registrations Imported Cars +16.5% (30.7% of Total Cars Licensed) CO2 Emissions continue to fall SIMI member confidence survey positive enforcement an issue Costs of motoring : Year to June: Petrol -1.4%, Diesel -0.7%, Insurance +6.8%, Average New Car price -3.1% Making stronger contribution to Exchequer
EMPLOYMENT IN THE MOTOR TRADE (000s) 20.0 27.5 35.0 42.5 50.0 Q3 98 Q1 99 Q3 99 Q1 00 Q3 00 Q1 01 Q3 01 Q1 02 Q3 02 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14
CAR REGISTRATIONS 0.0 25.0 50.0 75.0 100.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(H1) NEW CARS (%) IMPORTED CARS (%)
NEW CAR REGISTRATION AVERAGE CO2 EMISSIONS 100 115 130 145 160 2008 2009 2010 2011 2012 2013 2014 (H1)
MONTHLY REGISTRATIONS 0 7,500 15,000 22,500 30,000 Jan Feb March April May June July Aug Sept Oct Nov Dec 2012 2013 2014
MARKET ISSUES Consumer demand & fragility Credit conditions positive for motor trade, but difficult elsewhere Imported vehicles growing part of the market Age of car fleet : 77.8% 5 years or older Average age >10y in 2015 Impact of dual plates strong story in July Important that Minister for Finance does not do anything to derail fragile market recovery
BUDGET 2015 2 bln adjustment not necessary, very risky Recovery in motor industry having very positive employment & Exchequer impact should not be de-railed Age of the fleet safety & environment Enforcement a big issue for the Motor Industry Maintaining current trend very important
EXCHEQUER REVENUES FROM MOTOR INDUSTRY H1 2014 NEW CAR REGISTRATIONS (mln) % GROWTH VRT 289 +21.9% VAT 252 +26.4% Total 541 +24.0% USED CAR REGISTRATIONS ( mln) % GROWTH VRT 77 +15.8% VAT 11 +15.0% Total 88 +15.7% GRAND TOTAL 629 +22.7%
DONEDEAL ADVERTISING MARKET 0 20,000 40,000 60,000 80,000 Jan-足12 Feb-足12 Mar-足12 Apr-足12 May-足12 Jun-足12 Jul-足12 Aug-足12 Sept-足12 Oct-足12 Nov-足12 Dec-足12 Jan-足13 Feb-足13 Mar-足13 Apr-足13 May-足13 Jun-足13 Jul-足13 Aug-足13 Sept-足13 Oct-足13 Nov-足13 Dec-足13 Jan-足14 Feb-足14 Mar-足14 Apr-足14 May-足14 Jun-足14 CARS MOTOR-足EXCL. CARS
ECONOMIC IMPACT & POTENTIAL OF INDUSTRY Contributed 629 mln to Exchequer in H1 2014 (1.8 billion in 2007) Every 10,000 extra new cars +82 million to Exchequer Q1 2014: 39,100 employed in industry 130 new jobs for every 1,000 extra cars sold Market of 95,000 in 2014 possible 105,000 in 2015, 115,000 in 2016 and 120,000 in 2017? Makes strong contribution to national and local economies
SIMI CONTACT US simi.ie/quarterlyreview suzanne@simi.ie dlee@ohpr.ie

More Related Content

The Irish Motor Industry - an Economic review Q2 2014

  • 1. WELCOME SIMI MOTOR industry review IN ASSOCIATION WITH DONEDEAL #MotorIndustryReview
  • 2. James BrookS SIMI PRESIDENT md of kia motors ireland
  • 3. industry in recovery First president to preside over a car market of 90,000 since 2008.
  • 4. Car Safety 1.2m cars tested last yr out of car parc of 1.9m 53% failed - 621,000 4,300 failed dangerously HOW MANY WERE NOT TESTED?
  • 5. increase in tests 754,000 cars tested so far this yr out of car parc of 1.9m 51% failed - 382,000 2,700 failed dangerously Why are there more cars being tested? Continuous Road Tax Increased NCT capacity New 5 Penalty points offence
  • 6. Why is this relevant to this morning?
  • 8. 2014 significant year for the motor industry First significant upward trend since 08 Suggests upward trend going forward 2nd yr of dual reg system july 1st best since 2nd jan 08 month may be best since 08 may be best july ever if trend continues 14 best yr since 08?
  • 9. But industry cautious cautious even talking about progress & potential to grow to 100k next yr conscious of fragility of recovery conscious of potential for any negative factor to set us back
  • 10. SIMI Member Survey q2 (june) over 60% confident about: outlook for own business outlook for industry positive but less than March (70%) moving toward budget time - impacting? ! potential for any increase in motoring taxes to derail recovery
  • 11. state gains from recovery in industry increased tax income gains in job creation - thousands of extra jobs in 400 towns - increase in apprentices confidence tax rev. & employment growth next yr. if no negative impact in budget
  • 12. focus on fleet renewal may be necessary next yr average car will be +10 yrs long argued for well focused incentives to renew ageing fleet Environmental, safety, exchequer + employment benefits far more creative & rewarding way to seek increased tax rev. but thats for another day
  • 13. q2 review - whats new? new data streams added interesting data on used car volumes - through garages - sales & trade-ins - by county - for first 6 months - growth of 17% survey - topics important to members - condition of ageing fleet - activities of black economy
  • 15. Jim Power report author Jim power economics limited
  • 16. Economic & Motor Industry Update Q2 2014 Jim Power July 15th 2014
  • 17. KEY ECONOMIC DEVELOPMENTS IN 2014 International recovery better but fragile Significant growth in Q1 GDP +4.1% Retail Sales Volume +7% Value +4.8% (J-May) Retail Sales Ex-Cars Volume +3.3% Value +1.4% Merchandise Exports (J-M) +0.3% Food +10.7% Chemicals -1% Live Register <400K Unemployment 11.6% Exchequer finances improving Credit conditions still challenging Housing market improving Consumer confidence stronger Successful exit from Troika
  • 18. Q1 ECONOMIC ACTIVITY % QoQ % YoY GDP +2.7% +4.1% GNP +0.5% +3.1% Consumption -0.1% +0.2% Gov. Expenditure -2.1% +2.6% Investment -8.1% +2.9% Exports Goods & Services +1.8% +7.4% Imports Goods & Services +0.8% +5.9%
  • 19. HOW REAL IS THE RECOVERY? THE EVIDENCE Modest recovery in retail sales, car sales very strong Labour market improving Exports still very volatile patent issue very distorting Manufacturing output strong Housing market improving Exchequer deficit falling tax revenues rising Troika exit and bond sales Business insolvencies declining Business & consumer confidence very strong External view very positive Many indicators moving in right direction Many challenges to work through
  • 20. EMPLOYMENT (S/A 000S) (000s) 1800 1900 2000 2100 2200 2004Q1 2004Q4 2005Q3 2006Q2 2007Q1 2007Q4 2008Q3 2009Q2 2010Q1 2010Q4 2011Q3 2012Q2 2013Q1 2013Q4
  • 21. CONSUMER CONFIDENCE 0 27.5 55 82.5 110 Mar-足05 Jul-足05 Nov-足05 Mar-足06 Jul-足06 Nov-足06 Mar-足07 Jul-足07 Nov-足07 Mar-足08 Jul-足08 Nov-足08 Mar-足09 Jul-足09 Nov-足09 Mar-足10 Jul-足10 Nov-足10 Mar-足11 Jul-足11 Nov-足11 Mar-足12 Jul-足12 Nov-足12 Mar-足13 Jul-足13 Nov-足13 Mar-足14
  • 22. PERSONAL DISPOSABLE INCOME bln 60 72.5 85 97.5 110 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
  • 23. THE MOTOR INDUSTRY H1 2014 New private cars registered +23.4% Light Commercial Vehicles +36.3% Heavy Commercial Vehicles +45% Every county reported good growth in new car registrations Imported Cars +16.5% (30.7% of Total Cars Licensed) CO2 Emissions continue to fall SIMI member confidence survey positive enforcement an issue Costs of motoring : Year to June: Petrol -1.4%, Diesel -0.7%, Insurance +6.8%, Average New Car price -3.1% Making stronger contribution to Exchequer
  • 24. EMPLOYMENT IN THE MOTOR TRADE (000s) 20.0 27.5 35.0 42.5 50.0 Q3 98 Q1 99 Q3 99 Q1 00 Q3 00 Q1 01 Q3 01 Q1 02 Q3 02 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14
  • 25. CAR REGISTRATIONS 0.0 25.0 50.0 75.0 100.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(H1) NEW CARS (%) IMPORTED CARS (%)
  • 26. NEW CAR REGISTRATION AVERAGE CO2 EMISSIONS 100 115 130 145 160 2008 2009 2010 2011 2012 2013 2014 (H1)
  • 27. MONTHLY REGISTRATIONS 0 7,500 15,000 22,500 30,000 Jan Feb March April May June July Aug Sept Oct Nov Dec 2012 2013 2014
  • 28. MARKET ISSUES Consumer demand & fragility Credit conditions positive for motor trade, but difficult elsewhere Imported vehicles growing part of the market Age of car fleet : 77.8% 5 years or older Average age >10y in 2015 Impact of dual plates strong story in July Important that Minister for Finance does not do anything to derail fragile market recovery
  • 29. BUDGET 2015 2 bln adjustment not necessary, very risky Recovery in motor industry having very positive employment & Exchequer impact should not be de-railed Age of the fleet safety & environment Enforcement a big issue for the Motor Industry Maintaining current trend very important
  • 30. EXCHEQUER REVENUES FROM MOTOR INDUSTRY H1 2014 NEW CAR REGISTRATIONS (mln) % GROWTH VRT 289 +21.9% VAT 252 +26.4% Total 541 +24.0% USED CAR REGISTRATIONS ( mln) % GROWTH VRT 77 +15.8% VAT 11 +15.0% Total 88 +15.7% GRAND TOTAL 629 +22.7%
  • 31. DONEDEAL ADVERTISING MARKET 0 20,000 40,000 60,000 80,000 Jan-足12 Feb-足12 Mar-足12 Apr-足12 May-足12 Jun-足12 Jul-足12 Aug-足12 Sept-足12 Oct-足12 Nov-足12 Dec-足12 Jan-足13 Feb-足13 Mar-足13 Apr-足13 May-足13 Jun-足13 Jul-足13 Aug-足13 Sept-足13 Oct-足13 Nov-足13 Dec-足13 Jan-足14 Feb-足14 Mar-足14 Apr-足14 May-足14 Jun-足14 CARS MOTOR-足EXCL. CARS
  • 32. ECONOMIC IMPACT & POTENTIAL OF INDUSTRY Contributed 629 mln to Exchequer in H1 2014 (1.8 billion in 2007) Every 10,000 extra new cars +82 million to Exchequer Q1 2014: 39,100 employed in industry 130 new jobs for every 1,000 extra cars sold Market of 95,000 in 2014 possible 105,000 in 2015, 115,000 in 2016 and 120,000 in 2017? Makes strong contribution to national and local economies