|Ford Ireland MD Ciaran McMahon with the new Focus ST Line.|
The Worldwide Harmonsised Light Vehicle Test Procedure (WLTP) has already caused some car prices here to be pushed up, and unless the Irish Government adopts an EU recommendation that the change in assessing fuel efficiency and emissions in cars is 'cost neutral' to consumers, it could 'destroy the market' here, a leading car company has warned.
Ciaran McMahon, chairman and MD of Ford Ireland says prices could rise by an average of 8pc at the end of August, when the first 'compass' of the new regulations comes into play.
"And if the Government doesn't change its tax bands to compensate, there would be a further 10pc a year later when the full compass is implemented."
All carmakers have to provide their products' fuel economy and emissions figures under the WLTP, by the end of August.
The new figures, under the 'real world' motoring test conditions, will show higher consumption and emissions than has the New European Driving Cycle (NEDC) system used for decades, and which carmakers have learned to 'game' to achieve unrealistic results.
The WLTP regime will particularly affect vehicles using older engine systems.
In Ireland and some other countries, both the VRT and Road Tax use the emissions figures to calculate the amount of taxation built into the retail price of cars.
But the real emissions as disclosed under WLTP will be higher, in some cases significantly, thus bumping up the wholesale prices of many cars. For instance, Ford Ireland's Kuga crossover price will go up by €1,000 under the new regime.
Car distributors here are currently gathering the data under the new system and have to show their results to the taxation authorities by the end of August.
They are also lobbying the Government, through the Society of the Irish Motor Industry (SIMI) to change the VRT and Road Tax bands so that the new emissions figures don't increase the retail prices to consumers.
"If there's no change in the bands, the impact for the Irish buyer could be huge," says Ciaran McMahon. "Sales could be halved, it would destroy the market. And it would be political suicide."
The Ford boss notes that a number of other countries in the EU who use emissions figures for taxation have agreed to adjust their tax bands to make the move consumer neutral. "Obviously the Irish authorities won't be making any decision until they have all the data in from the local distributors, and there's a danger that even if they ultimately change the bands, the initial 8pc average increase will never be reversed."
Speaking at the international launch of the new generation Focus, he also said that the new regime is going to have a major effect on the numbers of options and grades available, 'because the system won't be able to cope'. "Instead of a big list of options, we're probably going to have three or four grades, and a couple of option 'packs'."
The new system already has forced Ford to drop the 1.5 diesel from its Mondeo range here, which in Ireland represented 50pc of sales. "Now we're leading with the 2.0 diesel, and it is much more expensive."