Sales of SUVs accelerate in Ireland as richer drivers demand roomier cars

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Ireland is overtaking other European countries in its appetite for SUVs, with the vehicles now making up almost two out of every three cars sold.

Once the preserve of wealthy Range Rover owners or those needing off-road capability, sports utility vehicles have become increasingly popular everywhere thanks to changing consumer tastes — and richer drivers.

But in Ireland — where incomes have doubled over the past decade, public transport options are poor and the proportion of families with three or more children is the highest in the EU — the trend has been far more pronounced.

SUV sales are now 13 percentage points above the EU average, according to data provided to the Financial Times by the European Automobile Manufacturers’ Association, accounting for just under 65 per cent of all new passenger cars.

Sales in Ireland are beaten only by those in Cyprus and Latvia and far outstrip other countries with similar or larger populations.

“This is a trend that has accelerated in the last five years,” said Michael Gaynor, chief executive of Toyota Financial Services Ireland. “Can [sales] go higher? Yes [they] will.”

SUVs now dominate car markets in richer economies, squeezing out traditional family saloons and smaller vehicles.

Manufacturers favour them because they offer higher margins, with all but a handful of carmakers phasing out their nearest equivalents — estate cars — altogether.

They have also proved popular with motorists because of perceptions that they are safer. Ireland’s impressive growth — at $80,000, gross national income per capita is now well above the EU average of $54,000 — has also fuelled demand among the country’s 3.9m adults.

“SUVs may have been out of the price range of many consumers in the past,” said Gaynor. “That’s not so any more.”

Stephen Gleeson, managing director of Hyundai Ireland, whose Tucson SUV has been the country’s best-selling car for the past two years, acknowledges that “a bit” of the SUV craze reflects Ireland getting richer.

The Tucson has overtaken the Toyota Corolla hybrid vehicle, which at a starting price of €32,695 costs almost €8,000 less than the cheapest model in Hyundai’s range.

The shift in Ireland contrasts with the picture in Germany, France and Italy. There, smaller models — notably those produced by domestic carmakers — still rule the roads, with the VW Golf, the Peugeot 208 and the Fiat Panda respectively remaining the top sellers.

While many still view larger SUVs, such as BMW’s X7 and Mercedes’ G-Wagon, as status symbols, owners play down prestige as their motivation for trading up in size.

They highlight the practical merits instead. “I needed a bit of space for my tools,” said Alan Keogh, 61, a carpenter, who switched to a Tucson from a hatchback. “I’d never go back.”

Others cite flaws in the country’s infrastructure. Public transport is often either lacking, especially in rural areas, little used or inconvenient. Three-quarters of Irish people use cars every day, leaving the country with the second highest, and fastest growing, car dependency in the EU.

This reliance on cars is also hampering progress on Ireland’s environmental targets. Transport accounts for a fifth of Ireland’s greenhouse gas emissions, second only to agriculture. While emissions from other sectors fell last year, those from transport rose 6 per cent.

In 2020, the government added a nitrogen oxide-based charge to its vehicle registration tax, which has long taken account of carbon emissions. In 2022, the rates charged on more polluting cars rose further.

Some SUVs, such as the large diesel Mercedes G-400, now pay a VRT rate of 41 per cent of the value of the vehicle.

But Gaynor noted that data from the Society of the Irish Motor Industry showed that Irish drivers favour midsized SUVs, nearly 60 per cent of which are hybrid or fully electric.

According to SIMI, 18 per cent of all categories of SUVs registered this year are fully electric; 14 per cent are plug-in electric and 22 per cent are hybrid models.

Aaron Callaghan at LeasePlan Ireland, the country’s largest vehicle leasing business, said the tax changes were taking “some of the wind” out of SUV demand. Gleeson expected some people to be “priced out of the market” in the future — a good thing, according to some.

“I don’t agree with SUVs,” says Orla Jackson, 58, a legal executive. “They clog up the roads.”

Hannah Daly, a professor of sustainable energy at University College Cork, said cars in Ireland were about 300kg heavier now than two decades ago, meaning they need comparatively more energy to run.

“People feel safer in SUVs because of their higher driving position,” she told the Financial Times. “But this creates a vicious cycle, because larger cars make roads less safe for walkers and cyclists. It pushes people into more cars.”