SIMI, the Society of the Irish Motor Industry, is worried that Budget 2020 will have as severe an impact on the motor sector as did taxation changes ten years ago.

In 2009, as a result of taxation changes in that year’s budget, “car values plummeted, new car sales declined and the industry fell off a cliff,” according to the organisation.

SIMI says there is a “need for extreme caution in dealing with motor related taxation in the upcoming Budget, doubly so now that the Budget almost coincides with the Brexit date”.

Director general Brian Cooke (pictured) said: “Our industry is very concerned and angry at the possibility of sleepwalking into another potential 2009. The state must stop overburdening new, cleaner cars with tax, while at the same time ignoring the problem of replacing older cars, which is where the real emissions problems lie. 

“In fact, it’s even worse, as the VRT system discriminates against new cars when compared to older used imports. It would appear fthat the new car is being lined up as the easy target, but newer cars have the most up-to-date emission technologies and are less environmentally damaging than older used cars.  Uncertainty in the market leads to consumers holding onto their older car or importing an older car that is perceived to be good value.”

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SIMI believes that one part of hitting climate action targets is achieving sales figures of 150,000 new cars each year, at a time when Brexit has helped keep sales down to 112,000. “If a VRT increase is thrown into the mix for 2020, we will see a further fall; history, in particular 2009, tells us what can happen,” Cooke stated.

The organisation points to the European Commission’s advice that consumers should not be faced with increased taxation due to the new emissions testing regime, and underlines both that most other EU countries have followed this advice and that Ireland should be no different.

Cooke added: “The government’s Climate Action Plan proposed a transition to zero emission transport, which the industry fully supports — and is proactively engaged in rolling out cleaner technologies.  However, it is important to note that this transition is not deliverable in the short term, as it will take a number of years to achieve, and longer than is proposed in the plan. 

“We require the right measures that focus on gradual change and include sensible policies aimed at encouraging motorist to make the right choices that can lead to clean, affordable and convenient mobility solutions. This can only be achieved by allowing the new car market to flourish in 2020, which has clear environmental and economic benefits.”