4 February 2020

NOx Levy and Brexit halt growth of UK car imports

The latest used car sales stats released by car data experts MotorCheck.ie today shows that 2,354 fewer used cars were imported from the UK in January 2020 when compared to the same period in 2019. That’s a decrease of 25.7pc.

Commenting on the figures, Michael Rochford (Managing Director of MotorCheck in Ireland & the UK) said the decrease is largely attributable to two factors. "Firstly, more certainty over Brexit has seen Sterling recover in recent times and this has made it slightly more expensive to import a vehicle from the UK. Secondly, any gains that were there previously have been reduced further by the NOx levy that came into force from 1st January this year. This has particularly hit any vehicles with less than a EURO 6 compliant engine which is the majority of vehicles from 2016 backwards."

The NOx levy was introduced in last year’s budget and came into force on 1st January 2020. It is an additional amount levied against the NOx emissions of a vehicle which must be paid on top of the standard VRT amount on first registration of a vehicle in the state.

Examining the figures in more details shows that imports of Used Diesel vehicles actually dropped by 35pc whilst imports of Used Petrol vehicles rose by 4.2pc. In addition, used imports of commercial vehicles are not subject to the NOx levy and imports of commercials and HGVs actually increased by 13.5pc (2,061 units vs 1,816 units) in January 2020. With these figures there can little doubt that the NOx levy has been the main influencer on used imports thus far in 2020.

The news on imports has received a mixed reaction from the Motor Trade. Those franchised dealers who largely stock their forecourts with ex-PCP vehicles will be happy as it somewhat insulates the price of these vehicles against cheaper UK imports. Smaller independent dealers may come under pressure however, as many were reliant on stocking their forecourts with slightly older used vehicles from the UK.

The overall impact on the market will mean that supply will begin to tighten up on cars more than three years old and prices will begin to harden for that profile of used vehicles.

Premium brands are still the favourite when it comes to used car imports with Audi, BMW and Mercedes-Benz all occupying positions of the Top Five brands imported.