NI car sales suffer huge decline due to hike in excise duty

NEW car sales in Northern Ireland slumped by almost onethird last month as drivers steered away from sweeping tax changes.

But while it was one of the worst months on record, the figures should be “treated with a huge pinch of salt”, according to one economist.

Some 3,303 vehicles powered out of showrooms across Northern Ireland in April. That’s down 29% from 4,658 during the same month a year earlier, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

The top selling car in Northern Ireland is now the Hyundai Tucson, with 106 vehicles sold, followed by the Ford Focus in second place on 102. Many buy3,303 ers brought forward purchases to March, ahead of new vehicle excise duty (VED) rates coming into force on April 1, according to the trade body.

All new cars, except for those with zero emissions, are now subject to an annual flat rate charge. RAC research found the vast majority of drivers buying new cars are paying significantly more following the change.

Across the UK, sales fell by around 20%.

SMMT chief executive Mike Hawes said: “With the rush to register new cars and avoid VED tax rises before the end of March, as well as fewer selling days due to the later Easter, April was always going to be much slower.”

Richard Ramsey, Ulster Bank chief economist, said: “Northern Ireland’s car showrooms probably had one of their worst April sales figures on record. “Just new cars were sold last month, which compares with 3,488 in April 2009 when the global recession hit. The latest month’s figures represented a whopping 29% fall year-on-year.

“However, these headlines should be treated with a huge pinch of salt. A meltdown in the new car sales market is not occurring. Instead the hefty fall is distorted by changes to vehicle excise duty.

“It is more insightful to look at the underlying trend in new car sales. Looking at the first four months of the year, car showrooms had their worst start to a year in four years,” he added.

“Looking at sales in Northern Ireland over the last 12 months (56,124 cars) reveals registrations are down 3% relative to the previous 12 month period. This represents the lowest volume of new car sales since June 2014.”