Monday 1 May 2017

'Let's talk' plea sent out to Government amid fears of chaos as diesel targeted for price hikes

* KIA chief urges drive for more petrol cars
* Warns against 'sudden' moves on taxation

We need more petrol cars on the road, according to one industry figure
We need more petrol cars on the road, according to one industry figure
Eddie Cunningham

Eddie Cunningham

We have to urgently get more petrol cars back on the road to soften the blow of widely anticipated price increases for diesel, a leading motoring industry figure has warned.

KIA Ireland's managing director James Brooks appealed to government to begin 'dialogue' so there are no nasty legislative surprises like those that rocked the motor industry before.

He was alluding to the manner in which the basis of our motor taxation system was changed overnight in 2008 (from engine size to emissions) and how that left many new cars unsaleable and secondhand vehicles greatly devalued.

"The last thing we want is a sudden move. Sharp shocks are not good. The thing is there is no dialogue taking place on this," he said at the launch of the automaker's new Rio supermini on the Irish market.

"I think now if the Government suddenly moves to become more 'European' on tax policy, it would be worrying."

He outlined how such a development could have serious implications for car owners as the value of their motors could be affected. That could also apply to thousands who have PCP deals.

It is widely expected that diesel fuel will be hit in the next Budget at the earliest; that would have repercussions for new and used sales and values.

That concern would be magnified if the Government took more drastic measures on diesel, in line with what other EU administrations have in train.

Mr Brooks and other industry figures have said it is vital they know which way the legislative wind is blowing so they can tailor what they order for the market. They have to plan such major decisions six months in advance and if there were changes in the intervening period they could find themselves with a lot of stock that would be devalued and difficult to sell. For owners that would also mean a further fall in what their existing trade-ins are worth.

Mr Brooks said: "The dialogue really, really needs to start soon. The patterns in the market are only going to change in response to taxation. If, and when, fuel prices are harmonised there will be a notable shift towards petrol."

His intervention comes as far fewer buyers are purchasing new cars so far this month. The 20-day figures for February reveal a big drop on last year but they are expected to pick up significantly by month's end.

"The worrying trend is the market is down 35pc for February. A lot of brands are suffering. The reality is that our car market is weaker," he said.

Meanwhile the level of used-import buying is surging ahead and has already outstripped the total figure for February last year at 5,687.

But Mr Brooks predicted that imports will level off from June/July.

Indo Motoring

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