Economic Backdrop to Motor Industry

JimPower

May 1st 2014

IRISH ECONOMY SO FAR IN 2014

• Economy gradually gaining momentum

• Retail Sales Q1 Volume +7.9% Value +5.6%

• Retail Sales Ex-Cars Volume +2.6% Value +0.5%

• Car Sales +27% Q1

• Merchandise Exports (J-F) +3.2% Food +11% Chemicals +3.7%

• Live Register <400K Unemployment 11.7%

• Exchequer finances improving

• Credit conditions still challenging

• Housing market improving

• Consumer confidence stronger

• Successful exit from Troika

EMPLOYMENT (000’S)

Q1 04

Q3 04

Q1 05

Q3 05

Q1 06

Q3 06

Q1 07

Q3 07

Q1 08

Q3 08

Q1 09

Q3 09

Q1 10

Q3 10

Q1 11

Q3 11

Q1 12

Q3 12

Q1 13

Q3 13

1,600.00

1,700.00

1,800.00

1,900.00

2,000.00

2,100.00

2,200.00

CONSUMER CONFIDENCE

Mar-9

7

Sep-

97

Mar-9

8

Sep-

98

Mar-9

9

Sep-

99

Mar-0

0

Sep-

00

Mar-0

1

Sep-

01

Mar-0

2

Sep-

02

Mar-0

3

Sep-

03

Mar-0

4

Sep-

04

Mar-0

5

Sep-

05

Mar-0

6

Sep-

06

Mar-0

7

Sep-

07

Mar-0

8

Sep-

08

Mar-0

9

Sep-

09

Mar-1

0

Sep-

10

Mar-1

1

Sep-

11

Mar-1

2

Sep-

12

Mar-1

3

Sep-

13

Mar-1

40

20

40

60

80

100

120

140

PERSONAL DISPOSABLE INCOME

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201460

65

70

75

80

85

90

95

100

105€bln

GROWTH IN CONSUMER EXPENDITURE

2007 2008 2009 2010 2011 2012 201380

85

90

95

100

105

REAL NOMINAL

(2007=

100)

RETAIL SALES

2005 2006 2007 2008 2009 2010 2011 2012 201340

50

60

70

80

90

100

110

120

130

Motor Trade -Volume Motor Trade -ValueRetail Sales ex-Motor Trade Volume Retail Sales ex-Motor Trade Value

(2005 =

100)

THE MOTOR INDUSTRY Q1 2014

• New private cars licensed +26.6%

• New Goods Vehicles +50.9%

• New Tractors +28.6%

• Every county reported good growth in new car registrations

• Imported Cars +27.2% (25% of Total Cars Licensed)

• CO2 Emissions continue to fall

• SIMI member confidence survey much better

• Costs of motoring : Year to March – Petrol -5.3%, Diesel -4.7%, Insurance +4.4%, Average New Car price -2.7%

• Making stronger contribution to Exchequer

EMPLOYMENT IN THE MOTOR TRADE

Q3 98

Q1 99

Q3 99

Q1 00

Q3 00

Q1 01

Q3 01

Q1 02

Q3 02

Q1 03

Q3 03

Q1 04

Q3 04

Q1 05

Q3 05

Q1 06

Q3 06

Q1 07

Q3 07

Q1 08

Q3 08

Q1 09

Q3 09

Q1 10

Q3 10

Q1 11

Q3 11

Q1 12

Q3 12

Q1 13

Q3 13

0.0

10.0

20.0

30.0

40.0

50.0

60.0

(000s)

CARS LICENSED

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

50,000

100,000

150,000

200,000

250,000

NEW CARS IMPORTED CARS

GROWING PENETRATION OF IMPORTED CARS

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.0

20.0

40.0

60.0

80.0

100.0

NEW CARS (%) IMPORTED CARS (%)

NEW CAR REGISTRATION AVERAGE CO2 EMISSIONS

2008 2009 2010 2011 2012 2013 2014 (Q1)100

110

120

130

140

150

160

170

MONTHLY REGISTRATIONS

Jan Feb March April May June July Aug Sept Oct Nov Dec0

5,000

10,000

15,000

20,000

25,000

201220132014

MARKET ISSUES

• Consumer demand

• Credit conditions

• Imported vehicles

• Age of car fleet : 77.8% 5 years or older

• Impact of split plates

• Important that Minister for Finance does not do anything to derail market recovery

ECONOMIC IMPACT & POTENTIAL OF INDUSTRY• Contributed €763 mln to Exchequer in 2013 VRT &

VAT (€1.8 billion in 2007)

• Every 10,000 extra new cars +€82 million to Exchequer

• Q4 2013: 37,400 employed in industry

• 130 new jobs for every 1,000 extra cars sold

• Market of 90,000 in 2014 possible

• 100,000 in 2015, 110,000 in 2016 and 120,000 in 2017?

• Makes strong contribution to national and local economies