The motor trade got off relatively easy in the Budget. But PADDY COMYNdetects a new push on buyers towards diesel-powered vehicles
THE ANNOUNCEMENT in the recent Budget – that there was to be another 4 cent added to the price of petrol and 2 cent on to the price of diesel – on the surface at least, appeared to be a pretty mild measure compared to the savage cuts meted out in other areas.
The motor trade breathed a heavy sigh of relief as there was the continuation of the scrappage scheme, albeit mildly diluted in terms of the allowance provided. And retailers of hybrid and flexifuel vehicles were also granted a stay of execution on the grant that made such cars reasonably affordable, even though in the case of the flexifuel models, only Renault now retail the cars in any significant numbers and Maxol have now taken the decision to phase out the E85 fuel because the end of a duty derogation on it means that its price rises by 53 cent per litre and is now about 25 cent per litre more expensive than petrol.
Despite having made quite a significant song and dance about encouraging the use of biofuel and the cars that can use it, the Government has ensured that it is now a redundant technology. Only the Renault Clio, which happens to run on E85 bioethanol, sells in significant numbers. Ford and Volvo, the main flag-wavers of the technology in Ireland, no longer retail cars that run on the fuel.
Sales of new cars in Ireland this year were reasonably healthy, though they were still poor by what anyone could reasonably call normal standards. But they were significant in one area. Just 31.85 per cent of new cars sold so far in 2010 were petrol-powered, while 63.83 per cent were diesel-powered. The remaining fractions were made up by hybrid, electric and just 3.47 per cent were flexifuel.
It means that in just two years there has been a complete reversal of the fuel type we buy in relation to new cars. In 2008, 62.8 per cent of sales were petrol and 34.6 per cent were diesel. There has been a massive shift to diesel when it comes to new cars, but what about the rest of the car population?
When it comes to passenger cars, by combining the Department of Transport’s national vehicle statistics with sales of new cars in 2010, we know that up until the end of November there were 1,990,417 passenger cars on Irish roads and of this, 75 per cent were petrol and just 24 per cent were diesel.
More than one million of the cars on Irish roads are six years old or older and only a small percentage of these are likely to be diesel. Of the close to two million passenger cars on Irish roads, 24 per cent of these have an engine capacity of between 1.3 litres and 1.4 litres – which means that most, apart from the newest cars, will be petrol and most will be small cars. The second biggest group of cars is from 1.5 litres to 1.6 litres, at 14.6 per cent. So again, we can draw the same conclusions. For example, there are around 183,000 cars from the year 2000 remaining on Irish roads. In that year, 89 per cent of new cars sold were petrol models.
The extra 4 cent per litre on petrol will hit more people who won’t be able to buy a new car in 2011 because they don’t have the means or have access to credit. It will hit people who must use a car to get to work because there isn’t a credible public transport alternative for them either.
New car buyers are being pushed towards diesel cars in increasing numbers and by consequence are creating the notion that petrol cars are to be avoided at all costs. This is creating a demand for diesel cars on the used market too and these cars simply don’t exist in large numbers either. Expect and watch out for an increase in imports of used small diesel cars by dealers and individuals as a result.
But it may push more people towards car showrooms to buy new cars that they really can’t afford because perhaps they feel like they can’t afford not to.
