Vehicle Sale Forecast Signals a Positive Outlook - NextGear Capital Ireland
In 2015, car sales are up by 32% year on year and van sales are up over 50%. It is a very positive picture, which according to new dealer funding experts NextGear Capital is set to continue as the business injects significant funds to help car dealers to increase their stock levels to meet buyer demand.
Rapidly improving GDP performance, falling unemployment and rising consumer confidence are driving a notable rise in consumer consumption – and vehicles are high on the list of items being sought. With the Focus Economics Consensus Forecast panel projecting growth of 3.9%, NextGear Capital expects vehicle sales to be at the forefront of an improving economy as Managing Director David Mercer notes;
“Increases in vehicle sales are part of a virtuous circle of confidence that is returning across Ireland. Buoyed by an improving economy with new jobs and steadily rising wages, financial conditions have improved. Certainly, the residual issue of non-performing loans remains, but we expect the supply of credit to dramatically improve in the next 18 months – and in terms of supplying significant new credit lines to the retail motor trade, at NextGear Capital we are delighted to be in the vanguard of the return to normal credit supply.”
For new cars, NextGear Capital is expecting that sales will exceed 125,000 in 2015 and grow strongly in 2016, which would likely see the country moving well ahead of the 142,000 units sold in 2008 to possibly 160,000 vehicles. Supporting a more confident buyer are strong manufacturer offers, as OEMs seek to maximize growing markets as other regions, such as China, slow down.
Assessing new van sales, a repeat of 50% growth is not on the cards, but building upon an impressive performance in 2015, a further rise of 20% is very possible because the country is still recovering from a low base. Central to this will be a return of confidence in the SME market, notably in construction and in the provision of vans to service the growing online shopping market.
The used market has been stifled of supply over recent years with new sales in the doldrums. 2014 saw an increase in total used sales including C2C to over 970,000 units with dealers increasing the number of vehicles imported from Northern Ireland and Great Britain to fulfil demand. This was in spite of the strong value of sterling. In 2015, an increase of around 10% is expected and into 2016 NextGear Capital anticipates total used sales volumes to be through the magical 1 million number, with around 200,000 of these sales being sold through dealers. As well as increasing volumes, the expectation is that the wider car parc age will reduce as newer stock enters the remarketing cycle, another indication of a more confident market.