Brexit and a new system for emissions testing have been blamed for an 18 per cent plunge in new car registrations in September compared with the same month last year.
Official statistics from the Society of the Irish Motor Industry (SIMI), published on Monday, show there were a total of 3,201 new cars registered during the month, compared to 3,897 in September 2017.
Registrations year to date are down 4.2 per cent (123,099) on the same period last year (128,548).
SIMI director general Alan Nolan called for measures to protect the motor industry in next week’s budget.
“The negative impact of Brexit is continuing to drive new car registrations ever lower while increasing the volume of used imports on foot of a low sterling exchange rate and the falling value of older diesel cars in the UK,” he said.
“We are also facing a further serious challenge with the rollout of the new WLTP emissions testing regime that is being phased in since September 1st on all new cars.
“Under the new test regime, new cars will face an additional tax burden compared to used-imports as the stricter test will produce higher CO2 values but this only applies to new cars.
“Unless the issue is addressed in the budget this could mean a vehicle registration tax (VRT) increase for motorists buying new cars, but not for those buying a used import, although the EU had stated that it was never intended that consumers should have to pay increased taxes as a result of an improved emissions test.
“If this is not addressed over the next two budgets in line with the phasing-in of this new WLTP regime this is exactly what will happen at a time when the new car market is already disadvantaged relative to the already large volume of imports.”
The figures showed new light commercial vehicle registrations (LCV), such as vans, were down 12 per cent (1,285) on September 2017 (1,460) but are up 5.6 per cent (23,788) year to date.
New heavy commercial vehicles (HGV), like trucks and lorries, increased 40 per cent for the month (191) when compared to the same period last year (136), and are up 5 per cent (2,337) so far this year.
Imported used cars showed a slight decrease of 1.9 per cent (8,494) compared to September 2017 (8,662), and, year to date, are 9 per cent (77,277) ahead of 2017 (70,813).
Mr Nolan specifically called on the Government to implement a “small interim adjustment” to the VRT bands for 2019, while a “more accurate adjustment” can be made for 2020 when the full WLTP is due to be implanted.
“We strongly believe that this is the only strategy that can protect State revenues and the environment as well as supporting the viability of businesses and employment in the Irish motor industry,” he said.
“The other key issue for the industry as well as for the business sector and those who live in rural Ireland, is the need to avoid unnecessarily increasing diesel taxation, whether VRT, road tax or fuel excise duties.
“Any discriminatory measures in relation to diesel are unnecessary, will make it more difficult for current diesel owners to trade up to a zero-emitting or lower emitting car and has the potential to further destabilise the car market.
“Given the importance of diesel cars for those living in remoter areas, any such negative moves would impact unnecessarily harshly on rural Ireland.
“Increasing diesel tax will increase the cost of doing business in Ireland which will also be challenged by the fall-out from Brexit. Such policies should not be implemented without detailed examination of the potential for damaging, unplanned consequences.”
