BMI Research takes industry temperature
- July 5, 2017
- Posted by: Alan Feldberg
- Category: IBIS News
Thomas Glendinning of BMI Research told IBIS Ireland 2017 that new vehicle sales in the country would decline by 6.7% in 2017 despite the country’s positive numbers in terms of GDP.
However, he said that the challenging figures would not last and that a return to growth was expected as the UK pound began to grow again in relation to the euro.
Thomas said that Ireland’s GDP growth was actually the third strongest in the EU, and that BMI Research expected it to become number one in 2018. Despite that, however, the sluggish new car sales in the country presented the industry with a challenge.
He said that part of the reason for that was canny Irish consumers, who were making the most of the currency situation and buying their vehicles in the UK. But BMI says the pound will regain lost ground in the next four years and car sales in Ireland will pick up as a direct result.
One area of the market where Ireland is strong now, though, he said, is the LCV segment. He said that housing construction in the country is booming, which will increase demand from tradesman and other small businesses, while Ireland’s online retailing market is also very strong compared to the rest of Europe, putting a large demand on last-mile deliveries. Also working in favour of the LCV market is that the average age of vehicle has been increasing since the 2008 crash, meaning demand for replacements is growing.
One area where Ireland is strangely under-developed though, is in the uptake of electric vehicles (EVs), despite a fairly mature EV infrastructure.
Taking a wider focus, Thomas said that global vehicle sales growth will slow to 2.5%, dragged down by the American market. He said that growth in emerging markets remains strong at 5.3%, while Asia and Europe were enjoying moderate growth. However, the North American market is the worst performing sector on the global stage
One thread underpinning all markets though, is trade uncertainty. It has led to a rise in protectionist politics within the five leading markets, which is bad news for the automotive industry, which is global by nature.
The uncertainty is a result of a number of trade agreements being negotiated, such as the North American Free Trade Agreements, and the UK’s relationship with the EU. BMI Research also said the EU was negotiating with Japan.
One area where BMI is really bullish though, is in its predictions for the growth of electric vehicles in the coming years.
It said hybrids would set the pace in 2017, but the launch of General Motors’ Bolt would be the litmus test for pure EVS and test the theory that a 200-mile range would satisfy customers.
But while EVs can look forward to a promising future, the same is not true for diesels, with top-down pressure in the shape of legislation and pressure from the grassroots both working against it.
IBIS is only possible thanks to the support of headline partners AkzoNobel and Audatex, and partners Enterprise Rent-a-Car and Synergy.