Car dealers want scrappage scheme to avert jobs crisis
The Society of the Irish Motor Industry (SIMI) claims 3,000 jobs have already been lost since September with another 3,000 positions at risk because of a sharp downturn in business.
Figures released by the society show new car sales fell by more than 66% last month compared with the same month in 2008.
Fewer than 16,000 new cars were sold in January, traditionally the busiest month of the year, compared with more than 47,000 last year.
Not surprisingly, sales of luxury models like BMW, Mercedes and Lexus suffered severe reductions. However, Jaguar achieved highly respectable sales of 30 new models in January, just seven less than the same period in 2008.
Sales of light commercial vehicles were also down more than 80%, while sales of heavy goods vehicles were down by 67%.
SIMI director general Alan Nolan said the results were unsurprising as the industry had predicted that new car sales this year could fall below 100,000 compared to 152,000 last year. He also pointed out that the 47,609 cars sold in January 2008 was the single largest monthly figure, which was unlikely to be repeated for some time.
Mr Nolan warned that more dealers faced closure due to the stark changes in the economy unless the Government took immediate steps to introduce a rescue package to stimulate the market.
Many of the 50,000 people working in the industry had already taken pay-cuts, while many more were working on commission-only, he pointed out.
“The equivalent of four of five Waterford Crystals have already been lost in our industry. It is very worrying as businesses are shedding jobs at what is usually our busiest time of the year,” said Mr Nolan.
Although Finance Minister Brian Lenihan told the Dáil last week that he had no plans to introduce a new scrappage scheme, Mr Nolan said there were almost 312,000 cars over 10 years old on Irish roads — almost 100,000 more than when a similar scheme was last introduced between 1995 and 1997.
SIMI claims a scrappage scheme would boost both Government revenue and the trade as well as allowing motorists to switch to more environmentally-friendly cars with lower VRT and road tax rates.
The organisation also called on the Government to change the anomaly whereby the motor trade is the only industry required to pay VAT on losses. Mr Nolan said such a rule had placed “an unacceptable burden” on car dealers.
The lack of enforcement by state authorities on the large number of British-registered cars in the Republic whose owners failed to pay VRT and road tax was also criticised. The society estimates the exchequer is losing up to €100m per annum over the failure to adequately oversee the registering of such vehicles.
Mr Nolan said the exchequer received €2bn from VRT and VAT in 2007 and €1.5bn last year. However, revenue could fall to €500m unless the Government takes action to redress the situation.
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