Sterling’s weak exchange rate in relation to the euro drove Irish motorists to increase the amount they spent on an imported vehicles by 34 per cent in 2018, a year when used imports reached a record high.
An analysis of nearly 6,000 transactions by Fexco Corporate Payments showed that the average vehicle imported from the UK cost €21,612, €5,478 up on 2017.
Figures released last week by the Central Statistics Office detailed how 7.5 per cent more vehicles were imported last year than in 2017, totalling 99,456 for the 12 months. That came as the number of new private cars on the Republic's roads fell 4.6 per cent to 121,157.
The trend towards imported vehicles has caused some car brands to push for a change in the State’s attitude to what is viewed in some quarters as a cheaper option.
Nissan called on the Government to ban used-car imports from the UK where registration pre-dates 2014, saying that would generate €400 million in new revenue for the exchequer. That followed a Sunday Independent report which said the Government was examining the growing phenomenon of used-car imports.
Under the existing tax regime, when a new car is purchased a consumer pays both vehicle registration tax (VRT) and VAT. However, a vehicle imported from the UK generates only VRT for the State.
Public health
And while the State is losing out from a budgetary perspective to some degree, carmakers argue the increasing diesel imports are detrimental for public health.
“The Government cannot solve the carbon emissions problem when it is allowing 100,755 polluting cars to be put on to Irish roads each year,” said Nissan Ireland’s chief executive James McCarthy.
Nevertheless, non-electric vehicles are still most popular in the Republic, as figures from the Society of the Irish Motor Industry show. Nissan’s own electric Leaf model was the 50th most popular car in the Republic in 2018 with 789 unit sales. Its Qashqai, meanwhile, was the second most popular model with 4,004 unit sales.
Nissan's call to tackle imports came after the Department of Finance said "large-scale importation of used diesel cars" was "undesirable". A spokesman said the department was "examining options" which could be brought forward for the tax strategy group, which prepares a range of options to be considered in the budgetary process.
In any event, evidence from Fexco shows the euro’s strength against the pound pushed more motorists to import a car directly from the UK and order higher-spec models.
Data from the payments company showed that, in total, motorists increased their spending by 59 per cent, almost double the increase recorded by car dealers.
"While Ireland's car dealers were the first to spot the buying opportunities offered by cheaper British imports, the savings are now attracting growing numbers of individual buyers too," said head of dealing at Fexco Corporate Payments, David Lamb.
