1 October 2013

Motor Industry needs Swappage incentive

Figures from SIMI show a rise in new car sales for September of 28 percent on the same month last year. However, for the year, new car sales are down 7 percent on last year.

Alan Nolan, SIMI.
Year to date, registrations are down 7 percent on 2012 which was already 12 percent down on 2011. The introduction of the new 132 registration plate in July has been the one bright spot in a very poor year, the second registration period having improved this year's performance from 15 percent down at the end of May to 7 percent down at the end of September, says Alan Nolan, Director General of SIMI.

It is in this context that the Industry is asking the Government to introduce a 'Swappage' incentive (€2,000 VRT refund on new car purchase of trading a six year old car or older) in this month's Budget. Such a scheme, he says, as with Scrappage, will have no cost to the State, and should deliver an extra €80 million in VRT and VAT in addition to supporting some 2,200 extra jobs right across the country. The additional jobs are worth an additional €50 million to the Exchequer.

In 2008, the Exchequer collected €2 billion in VRT and VAT from new car sales. This year, it will collect around €600 million. Swappage will help kick start a return to increased revenues as well as protecting and increasing the 36,800 jobs currently in the Motor Industry.