Calls have been made for new Government measures to secure the 50,000 jobs in the Irish motor industry, after new car sales fell 66.5 per cent in January.
The Society of the Irish Motor Industry (SIMI) says the industry is in crisis and with 3,000 jobs lost in the last quarter of 2008, more are likely to follow if the Government does not introduce support measures.
Alan Nolan, director general of SIMI, warned that while Government revenue from new car sales was €2 billion in 2007, it had fallen to €1.5 billion last year and "it is estimated that, unless action is taken swiftly by the government tax revenue from new car sales this year could drop to €500 million".
The proposed rescue package for the industry includes the introduction of a new scrappage scheme for cars 10 years or older. Nolan said the scheme would assist motorists' transition to cleaner, greener vehicles and allow customers take advantage of preferential tax rates. "It's a win for the government in terms of increased tax revenue, a win for customers in terms of safety and a win for the environment in terms of cleaner cars," he said.
SIMI has also asked for a review of the current practice on imposing VAT on the trade-in price of cars when the sale price is lower. For example, a car bought or accepted as a trade-in by a dealer may be have been valued at €20,000 but in the current climate it's sold at €10,000. The VAT, however, is paid on the initial value.
Finally, the industry group is seeking increased enforcement by Revenue officials of the rules on re-registering imports and a crackdown on illegal roadside car dealers.
He said they had already put the proposals to ministers and government officials. However, there are no indications that they have been accepted.
New car sales in January fell from 47,909 last year to 15,929. Ford topped the sales list with 2,853 new cars, followed by Toyota with 2,270, Nissan with 1,479, VW with 1,242 and Opel with 1,158.
Even for these firms the fall in sales have been significant. Ford sales dropped from 6,243 in the first month of last year, while brands like Chevrolet has witnessed their first month sales figures drop from 543 last year to just 54 this January. Mazda's new car figures fell from 1,609 to 504.
At the premium end of the market, BMW sales have dropped from 1,765 in 2008 to 397 this January, Mercedes is down from 1,746 to 309 and Land Rover's new passenger vehicle sales is down from 438 to just 26.