Car sales recover ground as tax change kicks in

CAR sales for the first seven months of the year have fallen for the third year in a row — but figures indicate buyers have been holding out to take advantage of the VRT changes.

Figures from the Society of the Irish Motor Industry (SIMI) show that although car sales for last month are up compared with July 2007, figures for the year to date have fallen 15.4% on last year.

A total of 16,418 cars were sold in Ireland last month, compared with 13,150 in July 2007. The figures represent an increase of 24.85%.

SIMI director general Alan Nolan said falling sales in May and June of this year were due to consumers holding off on purchases until the introduction of the new VRT system last month.

“There is evidence that the new VRT and road tax systems that had been designed to encourage people to buy cleaner cars are actually working as planned. The average new car registered in July 2008 emits 21.4g/km less CO2 than those registered in July 2007,” he said.

However, despite the introduction of the new tax system, the figures represent a 15.39% drop on sales for the first seven months of 2007 and a 10.5% drop on sales for the same period in 2006.

Mr Nolan pointed out that while the figures represented a drop on last year, sales for last month were at the same level as the total car sales in Ireland in all of 2003.

“The registration figures represents a reduction from an exceptional performance last year which should be seen in context. The total of new cars to the end of July this year is the same level as the total new cars sold in the whole of 2003, which was also a good year,” he said.

Mr Nolan added that the VRT changes had resulted in better value for the consumer and that the outlook for the coming year was very positive.

“As we have previously stated, the budget changes have clearly resulted in great value in the new car market but have also delivered incredibly good value for buyers of used cars. This provides a very positive base for the industry in looking forward to 2009,” he said.

Light commercial vehicle registrations for the first seven months of 2008 (26,358) are down 26.57% on the same period last year. Heavy vehicle (HGV) registrations are down 25.27%.

The five most popular brands of car bought in Ireland so far this year are Toyota (14.31%), Ford (12.51%), Volkswagen (10.57%), Opel (8.34%) and Nissan (7.66%).