Domestic taxes and the price of cars

Sir, – While it’s correct that right-hand drive production costs will have some effect on Irish car prices (Letters, December 27th), such costs are perhaps less significant than the cost impact of domestic taxes.

In mass-market car manufacturing, economies of scale mean that the additional cost per unit of making a right-hand drive variant is at worst moderate.

Cars, both new and second-hand generally, are cheaper in Britain (and in Japan) than in Ireland, and the primary reason for this is Irish taxation, specifically higher VAT and, of course, vehicle registration tax, which is a protectionist car tax.

Having access to an even larger pool of left-hand drive foreign cars would make little difference, as the pricing bottle-neck derives materially from a domestic fiscal policy choice, not from a lack of supply options. – Yours, etc,