Hyundai calls for temporary cut in vehicle registration tax to boost car sales in July

The head of Hyundai Ireland has called on the Government to temporarily cut the cost of vehicle registration tax (VRT) on motor vehicles to help boost the sale of new cars in July, when the next round of registrations takes place.

The industry has been hammered since lockdown restrictions were introduced in March to contain the spread of Covid-19, with just 344 vehicles sold in April.

Speaking to Inside Business, a podcast from The Irish Times, Stephen Gleeson said: "What the Government should do is introduce a one-off for the month of July €3,000 VRT reduction to encourage people to come out and buy a car in July.

“There’s a taxes and jobs element here that’s very relevant. Let’s say we could sell 10,000 new cars in July. The average tax on a standard new car is €15,000. A €3,000 reduction would still mean a €12,000 tax on 10,000 cars, which is €120 million in extra taxes for the government.

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“One new car sale can also generate two or three other [used] car sales [because people trade in]. If we can’t open before the 8th of June this will cost jobs in our industry. If ever there was a no-brainer this is one.”

Mr Gleeson noted that there were 50,000 employees in the motor industry, with potentially 10,000 jobs at stake if some action is not taken.

Typically, some 25,000 new cars would be sold here in July, with Hyundai claiming a 10 per cent share of the market.

Mr Gleeson was critical of the Government’s decision to prevent dealers from opening their showrooms for new sales until June 8th, noting that they would generally only get 12 to 15 people per day visiting their premises – which typically extend to 4,000sq ft – to purchase a car over a 10-hour day.

“Social distancing is beyond doable in a car sales showroom,” he said, adding that the Government should allow showrooms to open next Monday when after sales are allowed to restart.

“April was a complete write-off for the industry. Up to the lockdown we were probably heading for a market this year something approaching last year [117,000 sales], which in itself wasn’t great. But that’s out the window now.”

Spare parts

The lockdown has been much more positive for online Irish trader Micksgarage. com, which sells spare parts for vehicles. Ciaran Crean, who owns the company with his brother Mick, said its business in April was up 100 per cent year- on-year, with the result that the company has begun hiring new staff to meet demand.

Its best sellers have been car batteries (up 560 per cent year-on-year in April), and battery charge packs, and it has supplied various products to the Garda and other frontline services.

“We’re grateful for the increase, and will take it as it’s going. We would hope to see a continuing migration of consumers online. We’ve had a significant amount of new customers who haven’t used us in the past,” Mr Crean said.