The Motor Industry has been suffering from the impact of Brexit since 2016 with new car sales down by 15% over the last 2 years, while the registration of imported used cars is up by 111% over the same period.
Our Industry is extremely worried at the potential for a devastating impact post-Brexit, similar in scale to the collapse of 2009 which resulted in the Market contracting to less than 50% of its current total. This saw 200 companies ceasing to trade, more than 10,000 people losing their jobs and State revenues falling by almost €1Billion.
The current fall in the new car market has resulted from an average Euro to Sterling value of 88p, but with a No-Deal Brexit from March 29th we may well see Sterling at parity or even below.
While SIMI is not trying to create barriers to trade, it is important to recognise that the level of used imports is unnaturally high and is having an impact on widening the cost to trade-up to new or newer cars. This is not just an issue for the Industry.
For the State there is a potential reduction of up to €500 Million in VRT and VAT revenues, while there is also the Environmental challenge, both in terms of air quality and climate change arising from Ireland opening the door for such a flood of older cars, as currently over 75% of used imports are diesel vehicles over half of which are 4 years or older.
As a result of the new 1% VRT surcharge on a new diesel car we will register perhaps five to six thousand fewer new cleaner diesel cars in 2019, while at the same time we are likely to import in excess of 80,000 diesel cars, many of which are older cars producing on average double the levels of particulates and NOx of a new diesel car.
This highlights the illogicality of seeking to influence new car buying decisions while ignoring the impact of the current volume of Brexit-driven used car imports.
While EU regulations would support Ireland’s right to protect employment, business, tax revenues and the Environment, this may require specific Irish Legislation to implement new requirements.
A new Road Safety Bill is currently being drafted, providing opportunity for the State to include required amendments to ensure that the same safety and environmental standards that are required to be met by new vehicles must also be met by any used vehicles, seeking to be put into service here.
Commenting on the Industry’s concerns, Brian Cooke (SIMI Director General Designate) said: “Over the past two years our Industry has faced this huge flood of older UK cars that has been hugely damaging to business and will make our environmental challenges even more difficult. So long as there was hope of an Agreement, that would benefit Ireland overall, SIMI was not calling for the introduction of barriers on the movement of used cars which could have been seen as a first step in the building of a border on this island. In the event of a No-Deal Brexit all of this changes and the State has a responsibility to protect Irish jobs, businesses, tax revenues and our environment. It is a question of survival for so many businesses in the Sector that the State must be Brexit-ready with required legislative provisions already in place in advance of March 29th in the event that we move immediately into No-Deal Brexit.”