A €3,000 VRT rebate to buyers could kick-start 202 reg season

BY BRIAN BYRNE

A SHORT-TERM cut of €3,000 in VRT on a new car, to be given directly to customers, could help save the 202 car registration period, according to the boss of a leading car brand here.

Paddy Magee of Renault Ireland said such an incentive could also save the State from a tax loss of between €27m and €75m in the month of July alone.

It could mean the difference between a likely 60pc drop in July car sales and a lesser 30pc or even 15pc.

The move would help retain jobs in an industry that currently employs close to 50,000 people, and is worth almost €6bn a year in taxation.

The first in his industry out of the traps in a discussion on the possibilities of a post-lockdown car market, Paddy Magee spoke to Ireland’s leading motor journalists by video-conference last week.

Acknowledging that the only certainty at the moment is uncertainty, he said his group had been working hard with their 29-strong dealer network to make sure it was ready to do business once restrictions allowed.

But it will be business in a way much different than before coronavirus, he said. And he warned that many dealerships in all brands around the country are experiencing serious, possibly terminal cash flow problems.

‘Like every other business, we’re going to need help,’ he said bluntly.

  But added that, across the general business community, car showrooms probably lend themselves much easier to social distancing requirements than many others.

When they are allowed open again, all Renault dealers will have a ‘Back to Business Guidelines’ protocol aimed at protecting both staff and customers in a physical distancing environment.

Personalised video brochures sent to customer, visits by appointment only, and unaccompanied test drives of cars will be part of a new regime. Staff in both sales and service areas will be rostered in a way to minimise risk to all concerned, and hygiene stations will be in place at entrances.

‘If restrictions are lifted, we’ll be ready to go back to business in the best way possible. But it will all depend on the government’s re-opening plan, and the timing.

‘Will there be a July sales period? We just don’t know.’

Magee revealed Renault Ireland’s own offers to entice buyers back: They include a ‘Buy Now, Pay Later’ scheme, which will defer all repayments for three months. The offers will apply to both passenger cars and LCVs, and to the brand’s ‘Selections’ used car scheme. Rates of finance interest will range 2.20pc to 4.9pc APR, with cashback, service, and warranty options, depending on sector and brand.

He said the industry’s representative association, SIMI, has been in discussion with government on a range of possibilities. Among these is a critical need to change existing VRT tax bands to compensate for CO2 tax increases because of the new WLTP test regime.

Apart from helping to keep the motor industry from multiple liquidations and major job losses, incentives to help consumers buy new cars will also aid the state in meeting its commitments on the environment. “Our car parc is on average nine years old,” Magee says. “At the moment, many people can’t afford to change their eight, nine years and older car.

If we can bring down that average age, it will do more to help us meet our target than many other innovations.”

That’s part of an existential question for the world. But just immediately, there’s the existential question about one of the state’s key taxation cash cows. It needs a quick answer.