British diesel imports and WLTP disturb Irish market

The Irish new passenger car market is feeling the effect of Brexit, diesel demonization and WLTP.

Statistics from the Society of the Irish Motor Industry (SIMI) reveal that new passenger car registrations are down 4.2 per cent YTD October compared to the same period last year: 123,099 new cars were registered between January and the end of September, compared to 128,548 last year.

At the same time, the number of imported used cars has grown 9.13 per cent, to 77,277 units. SIMI points at the low sterling exchange rate and cheap British diesels. In the UK, diesels have all but fallen entirely from grace, leading to low residual values and hence an increased export to Ireland.

“We are also facing a further serious challenge with the rollout of the new WLTP emissions testing regime that is being phased in since 1st of September on all new cars", explains SIMI Director General, Alan Nolan. “Under the new test regime, new cars will face an additional tax burden compared to used-imports as the stricter test will produce higher CO₂ values, but this only applies to new cars. Unless the issue is addressed in the Budget this could mean a vehicle registration tax (VRT) increase for motorists buying new cars, but not for those buying a used import.”

Anti-diesel taxation

SIMI has called on the Government to implement a small interim adjustment to the VRT Bands for 2019, while a more accurate adjustment can be made for 2020 when the full WLTP is due to be implanted and more much accurate data on the new test results will be available.

In the meantime, the Irish government has decided to add a 1 per cent surcharge on the Vehicle Registration Tax for all new diesel cars starting January 1st, 2019. According to the Irish Times, the new diesel levy is estimated to add on average €400 to the cost of a new diesel. Contrary to expectations, excise duty will not be increased on the fuel – at least not in the short run.

This surcharge is added to the VRT, which ranges from 14 to 36 per cent depending on the car’s CO₂ levels. WLTP is sure to add a few grams of carbon dioxide per km, further increasing the tax liability for new cars. Instead of postponing the renewal of a car, it might be interesting for consumers and companies to buy a pre-registered, pre-WLTP diesel now to avoid extra taxes.