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VRT reduction needed to boost car sales - SIMI

Written by Business World, on 1st Oct 2020. Posted in General

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The Society of the Irish Motor Industry (SIMI) today released their official new vehicle registrations statistics and reiterated their call to Government to reduce Vehicle Registration Tax (VRT) 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.  

January 2021 will see a new taxation system for new cars tested under WLTP (new testing system). 

SIMI Director General, Brian Cooke commented: “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.”

He added: “With the duel threat arising from COVID and BREXIT, we simply cannot have the same destabilisation of the car market again. 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 our fleet renewal. This will inevitably lead to a fall in employment and undermine viable family businesses.”

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

Light Commercials Vehicles (LCV) are up 67.4% (2,240) compared to September last year (1,338) and year to date are down 18.6% (18,930). HGV (Heavy Goods Vehicle) registrations are up 12.5% (162) in comparison to September 2019 (144). However, year to date HGV's are down 23.6% (1,795). 

Commenting on the increase in new car registrations, Mr Cooke said: "September represents the first month this year to see an increase for new vehicle registrations, which 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% of what we should be achieving in a normal functioning new car market."

Mr Cooke concluded: "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.”

Source: www.businessworld.ie

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