Motor trade calls for higher taxes on used imports

Irish motor industry warns of massive job losses if taxes on new cars rise in the budget

The motor trade is pleading with the Government to tighten regulations on used-car imports amid stark warnings of job losses and a dramatic decline in new car sales in the face of Brexit.

At a press briefing on Tuesday morning attended by senior executives from most of the major car brands in the Republic, the Society of the Irish Motor Industry (Simi) warned that dealers are already suffering hugely from the impact of the Brexit vote, with new cars being substituted by used imports and the devaluing impact these imports are having on the the two million cars on Irish roads.

Economist Jim Power predicted new car sales could fall as low as 80,000 on the back of a no-deal Brexit, or as low as 70,000 if there are any tax increases on new cars in October's budget. He said the new car market this year will total 115,512.

Mr Power estimated that even in the case of a Brexit deal, new car sales will still fall to 105,000 and will be overtaken by used imports for the first time, which will rise to 115,000 next year. He said a hard Brexit will cost the exchequer €231 million in lost tax income on new car sales and put 10,000 jobs in the motor trade at risk.

Amid Brexit uncertainty Simi is calling on the Government to postpone any rises in taxes on new cars, but to replace the current 1 per cent diesel surcharge on new and used imports with a fairer tax targeting harmful nitrogen oxide (NOx) air-polluting emissions, which have been associated with adverse health effects.

Simi director general Brian Cooke said: "By allowing older polluting imports into the Irish car fleet we are only adding to our environmental challenge. In this regard the diesel surcharge introduced in last year's budget, which had a much greater impact on new cars, should be replaced by a charge that is focused on older imports.

‘Dirtier imports’

“Included in the imported cars to come in since 2016 are 250,000 cars whose NOx emissions is up to three times worse than current new cars. Yet last year they brought in a diesel surcharge that put more tax on the cleaner lower emissions new diesel cars than it did on the older dirtier imports.

“The UK is only delighted – not just from a business perspective but also from an environmental perspective – to get rid of cars they don’t want and that they intend to ban from cities. Nearly two-thirds of the used imports coming in are over four years old and they’re glad to get rid of them.”

Mr Cooke also called for mandatory car background checks on imports and pre-registration tests, similar to NCT inspections, on imports of four years or older. "We have a crazy situation in Ireland where if a vehicle comes into the State and Revenue knows that it has been an insurance write-off, they cannot refuse to register that vehicle. There should be checks in place. There aren't, so we do need more scrutiny of used imports," he said.

“It’s a very simple message. We’re not asking for any handouts. We’re just asking for a level playing field to give our members a chance to fix the new car market.”