Motor industry seeks reduction in Vehicle Registration Tax

While Volkswagen leads the Irish new car sales market after the first nine months, the Toyota Corolla is the top selling model.

While Volkswagen leads the Irish new car sales market after the first nine months, the Toyota Corolla is the top selling model.

January 2021 will see a new taxation system for new cars tested under WLTP (a new testing system ), and The Society of the Irish Motor Industry says any increase in Vehicle Registration Tax would have dire consequences for the sector, which is already struggling in the context of both COVID-19 and Brexit.

It adds that it would make new cars considerably more expensive, reduce demand, and would see thousands of job losses and business closures.

The SIMI has also reiterated its call to Government to reduce Vehicle Registration Tax in the upcoming Budget. A reduction in VRT would protect the 40,000 people employed in the industry, sustain business, stimulate new car sales, while helping to decrease emissions from transport and protect exchequer revenues.

Latest registration figures

New car registrations for the month of September have seen an increase of 66.3 per cent (5,685 ) when compared with September 2019 (3,418 ). However, total registrations year to date remain down 25.8 per cent (84,535 ) on the same period last year (113,945 ).

Light commercials vehicles (LCV ) are up 67.4 per cent (2,240 ) compared with September last year (1,338 ) and year to date are down 18.6 per cent (18,930 ). Heavy Commercial vehicles (HCV ) registrations are up 12.5 per cent (162 ) compared with September 2019 (144 ). However, for the year to date HCVs are also down, at -23.6 per cent (1,795 ).

Used car imports for September (9,522 ) have seen a decrease of 6.8 per cent on September 2019 (10,221 ), while year to date used imports are down 40.3 per cent (49,190 ) on 2019 (82,435 ).

Brian Cooke, SIMI director general, says September represents the first month this year to see an increase for new vehicle registrations.

"This can be attributed to catch up from the previous eight months of declining sales. Year to date, a far more accurate barometer, sees a reduction for the fourth consecutive year, leaving new car sales at recessionary levels, merely 50 per cent of what we should be achieving in a normal functioning new car market.

“January 2021 will see a taxation change for our industry, the biggest change to VRT and Road Tax since 2008. The 2008 change coincided with the recession, causing a collapse in the new and used car market with close to 15,000 jobs lost. With the dual threat arising from COVID and Brexit, we simply cannot have the same destabilisation of the car market again."

He says a more burdensome VRT regime will undermine both the new and used car markets, making new cars more expensive, impacting on used car values and slowing fleet renewal.

"This will inevitably lead to a fall in employment and undermine viable family businesses. What we need to see in the Budget is a taxation reduction that will support the new car market and which will be environmentally positive. This will protect jobs, businesses, renew our fleet and reduce emissions.”


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