Another record year sees car sales reach 145,000

Car sales climbed to a record 145,000 in 1998, boosted by a slight pre-Christmas surge from customers intent on avoiding the new-year increase in vehicle registration tax.

Some 2,000 cars were sold in December, about twice the normal figure for the month, according to the Society of the Irish Motor Industry. The total sales figure for the year was well up on last year's 137,000, which was also a record.

SIMI has revised upwards its post-Budget prediction of sales for 1999, but it remains pessimistic, predicting a decline to between 120,000 and 125,000 as the VRT increases take effect.

The society's chief executive, Mr Cyril McHugh, said it would continue to press the Minister for Finance to reverse the Budget decision.

The tax increases, effective from January 1st, add between £550 and £600 to the price of a typical 1.6-litre car. For cars in the 2.0 to 2.5-litre range, the increase is 11.3 per cent.

The effect of the increases will be clearer at the end of this month. January is traditionally the busiest period for car sales.

Some 14,000 cars were sold in the first month of last year, most of which had been pre-ordered. SIMI is reporting some cancelled orders this year, but says it is too early to estimate as many garages will "keep lines open" with cancelling customers.

Mr McHugh said the record sales in 1998 reflected the state of the economy generally. "The increase in employment and job security is a big factor, but it's also true that most people simply need a car to get to their place of work."

He said SIMI had been encouraged by criticism of the VRT increase at Fianna Fail's post-Budget parliamentary party meetings, and added that the industry was ready for "a long and difficult battle" to have the decision reversed.