Ireland New-Car Sales Plummet in November

Ireland’s new-car sales plunged 48.8% year-on-year in November to just 779 units, and the industry fears the market has yet to hit bottom.

After 11 months, new-car sales were up 1.8% to 89,522 units.

The Society of the Irish Motor Industry says that since the ending of the scrappage tax-incentive scheme, car sales have been on the decline, with each of the past three months down 50% on the year-ago result.

SIMI Director General Alan Nolan says the industry is concerned conditions will worsen if the proposed 2-percentage-point increase in the Value Added Tax to 23% is levied at the start of 2012.

Nolan says SIMI in October predicted new-car sales would fall to 70,000 units next year.

“Following the announcement of the proposed VAT increase, we have concerns that this figure will reduce further if the VAT increase were to impact in the first quarter,” Nolan says in a statement.

“With the reported increases in VAT, Road Tax and fuel duties, we could easily be facing another year where employment in the industry is again negatively impacted.”

SIMI is urging the government to delay the increase in VAT, a form of sales tax, until after the first quarter of 2012, when more than half of all new cars for the year are sold.

“We understand that the Exchequer needs to recoup lost revenue, but increasing the VAT during the busiest retail period is unlikely to achieve this. It is more likely to have the opposite impact,” Nolan says.

“If the VAT increase is deferred until after the peak selling period, it will give the industry some chance of stability next year. Because of the extreme seasonal nature of our industry, if sales are bad in January, sales are bad for the entire year. And if the VAT increase is introduced in January, we will no doubt see a fall in sales for the whole year, which will have a serious impact on jobs.”

Nolan says if the VAT increase is delayed until after the first quarter, it has the potential to spur increased retail activity, not only for the automotive industry but also all retail sectors, boosting both tax revenues and employment.

Volkswagen sold 17% of the new cars in Ireland in November with 135 units, making it the only manufacturer to reach triple figures. Opel was a distant second with 86 units, just ahead of Toyota’s 83. Ford followed with 63 units.

After 11 months Toyota remains the market leader with 11,569 units, ahead of VW at 11,142 and Ford at 10,417.

Light-commercial sales climbed 9.9% to 311 units, leaving the year-to-date total up 8.5% at 11,207.

Ford led the segment in November with 107 units for an 11-month total of 2,413. VW followed with 1,771, ahead of Renault’s 1,642.