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Ireland ? Tax Hike Pushed Car Sales Off-track
Oct 15, 2008

The automobile sales in Ireland declined in August 2008 under pressure of weak demand due to hike in car taxes, soaring fuel prices and tough credit conditions.

The Society of the Irish Motor Industry (SIMI) revealed that new car sales in terms of number in Ireland dropped 42% during August 2008 over the same month a year ago, as reported by IrishTimes
.

A total of 5,252 cars were sold in the country during August 2008 while it was standing at 8,991 Units in the corresponding month last year. Besides, the total car sales in the first eight months of 2008 slumped 16.71% against the corresponding period previous year to 145,643 Units. Also, the registration of LCVs (Light Commercial Vehicles) during the first eight months declined 29.28% and that of HGV (Heavy Good Vehicles) plummeted 26.5% in the same period.

The fall in the Irish automobile industry sales during August 2008 was primarily contributed by an increase in car taxes that were based on new emissions tax system enforced in the month of July 2008. High taxes pushed away the automobile buyers from showrooms. Besides, the economic slowdown across the European continent also played a key role in bringing down the automobile industry sales.

In addition, less liquidity in the credit market is another key factor affecting the sales of auto industry in the country as people are finding it extremely hard to access loans for buying cars. Rising fuel prices have forced buyers to reconsider their plans of buying cars as it will put extra burden on their pockets, decreasing the sales of vehicles in the country.

The Irish automobile industry is expected to see further decline in sales in coming months on account of negative business conditions. The sales are forecasted to touch the base by the end of 2008.

According to a Research Analyst at
RNCOS, “The automobile sales in Ireland are falling drastically owing to rise in car taxes, lack of liquidity in credit market and soaring fuel prices, decreasing the profit of car manufacturers as well as dealers. It will also affect the country’s economic growth, making financers to loosen the credit conditions so that consumer confidence to buy vehicles could be boosted. Other than this, at industrial level, manufacturers should come up with hybrid cars to expand their profits as the government has introduced tax rebates on environment-friendly cars. This will further lure customers to the market.”

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