9/1/2014: New vehicles licenses in 2013

New vehicles licenses for December 2013 were published yesterday, so we can now update figures for full year 2013.

In 2013, number of all vehicles (new and used) licensed in the state rose 13.12% compared to 2012. 2012 marked the trough of the crisis period licensing and 2013 marked the best year for the Motor Trade since 2008. However, compared to peak, all vehicles licenses were still down 50.88% in 2013.

Of the above, new private cars licenses declined 6.44% y/y, although these were up 31.1% on crisis period trough. New private cars licensed in the State posted their second worst year since the onset of the crisis in 2013 and are currently down 68.3% on peak.

New goods vehicles licenses rose 1.56% in 12 months through December 2013 compared to full year 2012, potentially signalling some improvement in the business activity in the economy. These are now 9.68% above their crisis period trough, but are still down 76.1% on pre-crisis peak.

Chart to illustrate:

14/11/2013: New Vehicles Licensed: January-October 2013

So the car sales... they are booming, right? Confidence is up, consumers are back to spending, the worst of Budgetary cuts are behind us, the economy is growing, unemployment falling, etc, etc, etc... We've heard them all. So let's think about it... we are into sixth year of the crisis; cars are getting older and replacement pressure is rising. You would expect the 'turnaround economy' to produce a rise in car sales. To accommodate such, the Government changed license plates.

So here are the numbers for January-October new licenses issued:

The uptick in new licenses in 2013 is due to used cars sales. New car registrations are down 2.62% y/y for the period, down 12.8% of 2011 (same period), down 46% on 2000-present average. New Private cars registrations are down 6.3% y/y, down 18.3% on same period 2011, down 46.2% on 2000-present average.

Back to that Consumer Confidence for some sugar buzz... 

8/8/2013: Cars licensing numbers for July are just not that spectacular

Latest data on new vehicles licensing data for Ireland was out today with bombastic headlines (see release here: http://www.cso.ie/en/releasesandpublications/er/vlftm/vehicleslicensedforthefirsttimejuly2013/#.UgPQ0GQmlF8).

So what is really going on in the data? Let me just recap what you will see below in a neat summary:

1. Increases in new licenses in July are real, but are most likely driven by timing underlying 131 vs 132 plates introduction.
2. Increases in July licensing numbers are not a signal of any significant improvement in the motor trade fortunes in Ireland.
3. Caution and patience (until we see full year numbers for 2013) are warranted on foot of total new licenses issued in January-July period of 2013 compared to past years numbers.

On a monthly basis, things are looking massively good, as the CSO release clearly indicates that 9,306 new private cars were licensed in July 2013, compared with 6,164 a year ago, an increase of 51.0% y/y - massive and strongly suggestive of some huge turnaround in demand. It should be noted that the 132 number plate was introduced from the 1st July 2013 (see note below).

That was the 'good' news. Was it really dramatic? Not if you look at the entire history of sales:

The only thing that was extraordinary about the July licensing figures was that in a historical context, these were not that extraordinary at all. Let's run through some numbers in more details:

• Year on year, all vehicles new licensing rose 43.9% in July 2013. These were also up 29.1% on July 2011 and 25.1% on July 2010.
• Alas, cumulative sales for 3 months May-July 2013 were down 13.9% on cumulative sales for 3 months of February-April 2013 although they were up 11.7% y/y. Good rise y/y but not as dramatic as 43.9%. 
• July 2013 licenses came in at 10.2% below the monthly average for January 2000-present, putting some cold icy water between the headlines reported and actual levels achieved.
• New private cars licensing was up, as noted above 50.8% in July 2013 compared to July 2012, but 3mo cumulative licensing numbers for new private cars were down 30.6% for the period of May-July 2013 compared to February-April 2013, although these were up 0.32% y/y.
• Let's think in monthly volumes terms: July 2013 licensing numbers were highest in only 4 months for all vehicles and new vehicles, and in new private cars, and in only 2 months for goods vehicles. I don't see drama here, folks. Just none...

Aside: the number of new goods vehicles licensed in July 2013 was 953, down 6.2% from July 2012 and these signal activity (or lack thereof) in SMEs sector.

But back to core numbers. The omitted news is that monthly sales might tell us something, but they don't tell us as much as we would like them to. The reason for this is that possibly July 2013 was the month when buyers hunting for 132 plates came into the market, having delayed their purchases from prior months. To correct for this we need to look at y/y comparatives for cumulative licensing January-July. For the sake of taking a short-cut, let's just look at data from January 2000 through latest. Chart below plots this data:

As you can see from the above, things are not getting better in the market, at least not so far. In January-July 2013, 

• Licensing of all vehicles declined 0.34% on 2012 and was down 11.8% on 2011. It was down 37.5% on average for the first seven months of the year for the period 2000-present and was down 5.45% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 all vehicles licenses are down not up y/y and are running below the crisis period average.
• Licensing of new vehicles (private and goods vehicles) declined 9.6% on 2012 and was down 20.5% on 2011. It was down 48.5% on average for the first seven months of the year for the period 2000-present and was down 6.6% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 all new vehicles licenses are down not up y/y and are running below the crisis period average.
• Licensing of new private vehicles declined 9.7% on 2012 and was down 22.8% on 2011. It was down 46.7% on average for the first seven months of the year for the period 2000-present and was down 6.7% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 new private vehicles licenses are down not up y/y and are running below the crisis period average.
• Licensing of goods vehicles declined 9.6% on 2012 and was down 9.2% on 2011. It was down 62.3% on average for the first seven months of the year for the period 2000-present and was down 4.8% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 goods vehicles licenses are down not up y/y and are running below the crisis period average.

I am not so sure we should be rushing out to congratulate our motors trade for delivering a magic turnaround on the above numbers, although we should stay cautious in terms of interpreting the overall sales until we have full year picture. Thus: caution, not celebration, is in order.

Note: Some are telling me that the industry is benefiting from 'spreading' the demand more evenly across the year under the new registration plates. In other words, allegedly, the industry was lobbying to introduce the 131 and 132 plates in order to reduce the rush of buyers in the first half of the year that took place under the original 13 plates (full-year plates) and transfer that 'surplus' demand to the second half of the year. This makes little sense to me. Suppose you transfer some sales from H1 into H2 (i.e. delay them by up to 6 months). What does this imply? By the time you do sell these 'spread-out' vehicles that you normally would have sold in H1, the money you do receive from the sales have been devalued by up to 6 months of inflation and you have incurred an opportunity cost of losing the interest on earnings that would have accrued were you to sell these 'spread-out' vehicles in H1. Is the motor trade sector that dumb? I don't think so. 

2/8/2013: New Vehicles Registrations and Motor Trade in Ireland: H1 2013

Latest stats on car sales in Ireland are revealing, especially when indices data is put alongside the actual volumes of cars sales. Recall that in 2013, Irish authorities have changed vehicles registration system and instead of full year, new licenses show first half of 2013 and second half of 2013 vehicles. This was done to appease the dealers' fear that superstition over number '13' on the plate will deter people from buying cars. Obviously, the dealers were not too enlightened to figure out that in the current climate, it is the Vehicles Registration Tax and VAT, charged consecutively (to make certain that double taxation becomes triple taxation) might be a greater deterrent from purchasing a vehicle.

So here are the results of the heroic subsidies and supports accorded to motor trade:

Put simply, there has been no change in the rate of decline in new private cars sales since 2011 H1. Sales of new cars in H1 2012 were falling y/y at the same rate as in H1 2013. Sales of used vehicles are at all-time lows and this means that what we are witnessing the figures is not a license plate year effect, but the effect of overall decline in demand for cars.

Why? Well, handy QNHS survey on the impact of the crisis on households (see more on this here: http://trueeconomics.blogspot.ie/2013/08/182013-anatomy-of-personal-crises-qnhs.html) might offer an insight:

Sixth most frequently cited measure to reduce household expenditure is... you guessed it - car usage or/and ownership. Over 12 months through July-September 2012, 36% of all households have cut back on car usage or/and ownership.

Thus, all vehicles registrations in H1 2013 are running at 27% below their 1997 levels, new private cars registrations are down 38% and new goods vehicles registrations are off 45.3% on H1 1997.  The latter, of course, is an indicator of health in SMEs sector...

8/4/2013: New Vehicles Registrations: Q1 2013

Q1 data for vehicles licensing for Ireland is out today. CSO provides good insight and data on these here.

Per CSO data:

• Q1 2013 saw 49,591 new and old vehicles licensed for the first time which represents a decline of 9.1% y/y and marks the lowest Q1 number of registrations since 1995. Compared to peak Q1 registrations, Q1 2013 numbers come in at -60.8%.
• In Q1 2013 there were 36,286 new vehicles licensed in the state, down 14.3% y/y and down 65.5% on peak. Number of new vehicles registrations in Q1 2013 was the lowest since 1995.
• In Q1 2013 there were 31,002 new private cars licensed in Ireland, down 14.1% y/y and 62.1% below the peak. Number of new private cars licensed for the first time in the state is now running at the lowest level since 1995.

Chart below summarises Q1 data for 1965-present:

In other words, all three series are now running below their historical (1965-2013) average (more specifically -3.51% for all vehicles licensed for the first time, -13.0% for new vehicles and -7.0% for new private cars).

7/3/2013: New Vehicles Regs for February 2013

New data on new vehicles licensed in Ireland in February is out and it makes for some depressing reading:

Note the precipitous decline in New Goods Vehicles - down 23% in February and down 21.4% in two months through February. This suggests that even if the "131" license plates are having an adverse effect on purchases, the investment cycle is not turning around still. Good Vehicles are a form of business investment in capital. They are also subject to set depreciation schedules, implying the need for replacement at some relatively stable rate over time. If economy was showing any signs of recovery, retail and wholesale trades, plus other domestic and exports-related activities would have translated in higher rate of capacity utilisation, including for goods vehicles. This, in turn, should translate in higher rates of replacement and new investment. So far - the data shows the opposite.

It is worth noting that the total number of used imported private cars licensed in February was 3,717 against 3,312 a year ago and the number of used goods vehicles rose from 737 in January-February 2012 to 883 in the same period 2013. Still, net effect is that of a more marked decline in goods vehicles than in private cars.

Here's the summary of historical data:

And the summary clearly shows that in terms of All Vehicles, we are now back to the levels of sales consistent with January- February 1994, in terms of New Vehicles sales and in terms of New Private cars sold to the level seen back in the end of 1993. Meanwhile, the State continues to rip off motorists at the ever increasing rate via fuel costs, registrations, VRT, VAT, licenses cost, etc.

10/3/2013: New Car Sales: Back to the Future of Exports-led Recovery

In line with the grand claims of revival of domestic demand around Christmas season 2012 and of green shoots sprouting everywhere where IBEC & IDA cast their eyes, the latest car sales stats are showing the glorious return of the autotrade to the late 1970s and late 1980s.

Per latest data, covering January 2013, as released by CSO (link here), gains in Irish trade competitiveness (aka contraction in domestic demand-driven imports) have bit hard into the motor sales sector.

Table below summarises short-term trends:

But possibly even more revealing are the stats for the month of January taken from 1965 onward:

Not a pretty sight. Current levels of All Vehicles new registrations are running at the levels of 1994, below 1989-1991 and below the levels of 1978-1981. Ditto for New Vehicles registrations and New Private Cars registrations. All three series are marginally above 2010 disaster year and the differences of all three from January 2010 are statistically insignificant.

Welcome back to the future where exports are rescuing us... possibly from ourselves.