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05 March 2003: In reactions to the news of a sharp drop in car sales revealed in the February figures, two key players suggest that the Government's high taxation policies are partly responsible.

The 18.8 per cent fall against February of last year has increased jitters in the business as anecdotal evidence of quite showrooms circulates in the motor trade.

Total registrations for the month were 19,624, with Ford (2,076) taking the number one position again and achieving 10.6 per cent of the market, ahead of Nissan (2,051), Volkswagen (2,031) and Toyota (1,960). Registrations for the year to date are down 5 per cent at 52,454.

"While showroom traffic was disappointing at a time when both supply and customer offers were plentiful, we shouldn't over state this dampening of demand," said Eddie Murphy, Chairman and Managing Director, Ford Ireland, in a less gloomy response than the overall industry. "Last year's figures for the month were inflated by the impending increase in VAT on 1 March 2002."

But the reality of total car and commercial vehicle sales for the first two months of the year down by over 7,690 units s bad news not only for the motor industry, motor dealers and even petrol companies, but it is especially bad news for the Government in its search for more sources of revenue, Fiat Auto Ireland MD Michael Howe said in his response.

He predicted a serious decline in sales if the Government kept to its policies of high taxes on all forms of motoring, and he reminded the Minister that a previous tax-break on cars had generated one of the biggest revenue booms in the country’s history - the huge lift in new car sales following the Government’s £1,000 tax credit to ‘scrappers’ in the mid-90s. He called on the Minister for Finance to ease the burden of double-tax on cars (VAT and VRT) and to consider a taxation structure which positively encouraged the more environmentally friendly vehicles becoming available.

"Every consumer in the country knows the golden goose law of economics," said Mr. Howe "The one that says if you tax any item enough and sales decline, damages or even kills the revenue stream."

	March 2003 - by Brian Byrne
'High tax policy will kill revenue' 05 March 2003: In reactions to the news of a sharp drop in car sales revealed in the February figures, two key players suggest that the Government's high taxation policies are partly responsible. The 18.8 per cent fall against February of last year has increased jitters in the business as anecdotal evidence of quite showrooms circulates in the motor trade. Total registrations for the month were 19,624, with Ford (2,076) taking the number one position again and achieving 10.6 per cent of the market, ahead of Nissan (2,051), Volkswagen (2,031) and Toyota (1,960). Registrations for the year to date are down 5 per cent at 52,454. "While showroom traffic was disappointing at a time when both supply and customer offers were plentiful, we shouldn't over state this dampening of demand," said Eddie Murphy, Chairman and Managing Director, Ford Ireland, in a less gloomy response than the overall industry. "Last year's figures for the month were inflated by the impending increase in VAT on 1 March 2002." But the reality of total car and commercial vehicle sales for the first two months of the year down by over 7,690 units s bad news not only for the motor industry, motor dealers and even petrol companies, but it is especially bad news for the Government in its search for more sources of revenue, Fiat Auto Ireland MD Michael Howe said in his response. He predicted a serious decline in sales if the Government kept to its policies of high taxes on all forms of motoring, and he reminded the Minister that a previous tax-break on cars had generated one of the biggest revenue booms in the country’s history - the huge lift in new car sales following the Government’s £1,000 tax credit to ‘scrappers’ in the mid-90s. He called on the Minister for Finance to ease the burden of double-tax on cars (VAT and VRT) and to consider a taxation structure which positively encouraged the more environmentally friendly vehicles becoming available. "Every consumer in the country knows the golden goose law of economics," said Mr. Howe "The one that says if you tax any item enough and sales decline, damages or even kills the revenue stream."
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