The Irish Times - Business - - BUSINESS | AGENDA - Michael McAleer

When it came to the im­pact of the 1 per cent ve­hi­cle regis­tra­tion tax (VRT) sur­charge on diesel cars, the of­fi­cial voice of the mo­tor trade didn’t pull any punches. “This was a poorly con­sid­ered mea­sure that ap­pears to have been in­cluded to give the per­cep­tion of an en­vi­ron­men­tal fo­cus in the bud­get,” said Alan Nolan, di­rec­tor gen­eral of the So­ci­ety of the Ir­ish Mo­tor In­dus­try.

Nolan is nor­mally a voice of re­straint com­pared to many of his mem­bers. Yet, for all the good op­tics about pro­mot­ing the change to al­ter­na­tives like hy­brids and elec­tric, he was clear that the big­ger im­pact will be on ru­ral and busi­ness buy­ers for whom diesel is still the bet­ter en­vi­ron­men­tal choice.

Diesel was al­ways in the Min­is­ter’s sights. While a spec­u­lated on rise in ex­cise on diesel fu­els never ma­te­ri­alised, the in­ter­na­tional cam­paign against diesel en­gines and their emis­sions, which harm air qual­ity, was never go­ing to es­cape his at­ten­tion.

The is­sue for the trade is that it’s not the only price im­pact in the pipe­line. New EU emis­sions tests, to pro­vide more real-life data, come into force on new cars from Septem­ber 2019.

As our tax regime is based on these of­fi­cial emis­sions fig­ures, new car prices are ex­pected to rise by an aver­age of €450 un­less the bands are changed in Bud­get 2020. The 1 per cent sur­charge will add an aver­age of €400 from Jan­uary to a new diesel car’s price.

The prob­lem for an in­dus­try al­ready mov­ing away from diesel is manag­ing the tran­si­tion. We are wit­ness­ing a mo­tor­ing rev­o­lu­tion with main­stream elec­tric cars, au­ton­o­mous driv­ing tech­nol­ogy and car-shar­ing schemes that of­fer al­ter­na­tives to own­er­ship.

Many mo­torists can­not af­ford to keep pace with the changes and have to opt for older mod­els.

Hav­ing tax and road traf­fic poli­cies keep pace with the new mo­tor­ing tech may be ad­mirable, but it risks leav­ing a mas­sive co­hort of mo­torists be­hind.

As for hy­brids and elec­tric cars, while the in­cen­tives re­main – in­clud­ing the im­por­tant 0 per cent rate of BIK on the first €50,000 of an elec­tric car’s list price – the choice of ve­hi­cles is rel­a­tively limited.

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