Early indications show that new car sales are up 16 per cent compared to the same period in 2007, despite potential uncertainty about the market due to upcoming changes in vehicle registration tax (VRT) in July, writes Paddy Comyn.
However, a survey released yesterday claims that 42 per cent of new car buyers this year plan to wait until after the changes take effect before making their purchase.
Figures for the first four days of the year show that 15,115 passenger cars sold compared to 13,026 for the first four days of 2007.
Alan Nolan, director general designate of the Society for the Irish Motor Industry (SIMI) said the prevalence for Irish consumers to buy cars early in the year is well established. "It is, however, a little too early to see any trends and it will take time to see any change in buying patterns," he said.
A survey by National Irish Bank has revealed that 42 per cent of Irish consumers who plan to buy a car in 2008 will wait until July. The survey stated that 72 per cent will consider buying a diesel-powered car, instead of a petrol-powered car, while 60 per cent of the respondents would be buying a new car in 2008.
According to Nolan, the benefits of holding out until July may not be as obvious as it might appear. "While there may be a saving on some models, it must be noted that the subsequent value of the used car will not be the same in July and, as a result, the cost to change may not be hugely different," he said.
The Irish Times spoke to a number of distributors and none of them were in a position to release their July prices as yet. Most reckoned it would be March or April before the real post-change prices are revealed.
Sales director of BMW Ireland Michael Nugent said: "We are not in a position to issue July prices yet, as there are a number of issues still outstanding in relation to exactly how the CO2 will be declared and by whom, which the industry and the Government are working on. In addition there is a possibility of a price change in March or April which will impact on future pricing," he said.
As vehicle registration tax is based on the Open Market Selling Price (OMSP) of a new vehicle, it is not as straightforward as changing the rate to see how much a new car is likely to cost in July, as any change in this price before July will affect the retail price.
Ireland is not the only country facing a change in its car buying patterns. Car registrations in Finland fell more than 65 per cent in the last two months of 2007 after November's announcement that car taxes would be cut in January.
In November, 3,755 new cars were registered and 2,093 were registered in December. This represents, respectively, a 66 per cent and 80 per cent drop on the number of units sold in previous months, which was over 10,000.
Finnish new car registrations made a huge leap upwards on the first working day of this year. A total of 2,429 new vehicles were registered last Wednesday alone, and the same pace continued on Thursday. The number of passenger vehicles registered in the whole of January 2007 was 16,893.
From the beginning of the year, car tax has been 10 to 40 per cent of the retail price, depending on the amount of CO2 emissions of the model in question, while previously the tax accounted for nearly a third of the retail price of a new car or an imported used car.
Analysts are predicting that some 161,000 new cars will be sold in Finland in 2008.