Car market remains fragile

The Irish car market remains fragile with new car sales down 14 percent on last year. New car sales fell by 42 percent in June to 6,370 units (down from 11,007 in June 2011) writes Trish Whelan.

If the Scrappage cars sold last June, before the scheme ended are excluded, this drop is 7.5 percent. Year-to-date new car sales are down 13.5 percent.

The figures from SIMI show that van sales were up 5 percent in June but down 5 percent year-to-date, while truck sales were down 17 percent in June but up 17 percent year-to-date.

This time last year, some 77,079 new cars had been sold. This is likely to be close to the overall total for the entire twelve months of this year.

"With half the year gone, and sales down by 10,000 units, business is extremely fragile and levels of activity are set to reduce for the rest of the year, so protecting jobs will be a key challenge for the sector in the months ahead," says Alan Nolan, Director General SIMI (pictured).

He added that should changes be made to Road Tax and VRT at a very challenging time for the motor industry, 'we have to caution that any negative changes in such a low market will have a direct impact on employment'. Mr Nolan said it's important that jobs are protected and measures to stimulate growth will deliver more for the Exchequer than increasing the burden of taxation. He said 'it is crucial both for State revenues and for employment that the sector does not continue to contract next year.

Some 37,000 people work in the motor industry, 'which is the equivalent of the Telecommunications, Legal and Accounting industries combined'.