Ireland’s economy is now something of a far cry from the high-growth ‘Celtic Tiger’ era that marked much of the last two decades. A property-based speculative bubble burst in 2007 and a viciously sharp contraction to the economy followed.
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The country’s precarious banking sector and overdrawn public finances have also drawn undesirable comparisons with financially battered and splayed on the rocks Iceland.
As is the Irish way, a bleak joke has been doing the rounds in Dublin’s pubs: what’s the difference between Ireland and Iceland? One letter and six months.
And don’t even mention collapsed house prices. They’re now hurting many, many people who over-extended when the good times rolled, seemingly inexorably. Some forecasters reckon the peak to trough decline on house prices in Ireland will end up as high as 80% – and they’re not there yet.
Ireland’s GDP is expected to contract by 7% this year (after a 2.3% reduction in 2008), reflecting a collapse in construction activity, depressed private consumption and falling exports.
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By GlobalDataAnd the car market? It’s not exactly thriving in these conditions.
From a high of 186,000 units in 2007, Ireland’s car market fell by almost a fifth to less than 152,000 units in 2008. This year, the downward spiral has continued.
Figures recently released by the Society of the Irish Motor Industry (SIMI) put April car sales at just 4,448 units – a staggering 66.7% down on the same month last year.
In the first four months, car sales of 36,997 units are down 65.2% on the same period last year.
Commenting on the dismal looking figures, Alan Nolan, Director General, SIMI said: “At 67% down, these figures are in line with our predictions for the month of April. As a result of the downturn, our own recent research shows that almost 5,000 jobs have been lost in the industry over the last six months.”
Is there a remedy? There’s no magic wand on the economy but, perhaps unsurprisingly, SIMI wants the Irish government to follow others in Europe and introduce a scrappage incentive.
“We were disappointed that a stimulus such as a scrappage scheme was not introduced in the April budget,” Nolan says.
Certainly the immediate outlook for car sales in Ireland looks bleak, especially without an incentive to lift volume. The car market should bottom out later this year, but it may well bounce along the bottom after that, local analysts say.
A recovery of sorts should get under way in the second half of 2010, but it will likely be a shallow upturn. After the long period that was the Celtic Tiger years, the shock of this unprecedented economic downturn in Ireland will take some getting over.
Dave Leggett
Ireland’s fragmented car market – leading marques’ sales in the first four months of 2009
Marque | Sales | % Share |
|---|---|---|
FORD | 5,314 | 14.36% |
TOYOTA | 5,274 | 14.26% |
VW | 3,841 | 10.38% |
NISSAN | 3,366 | 9.10% |
OPEL | 2,501 | 6.76% |
RENAULT | 1,654 | 4.47% |
SKODA | 1,586 | 4.29% |
AUDI | 1,437 | 3.88% |
PEUGEOT | 1,341 | 3.62% |
Others | 10,683 | 28.88% |
Total | 36,997 | 100% |
Source: SIMI
