Fleet News

Irish Cross-border trade highlights continuing European car price disparities

CROSS-BORDER trade is crippling new car dealerships in Northern Ireland, as Northern Irish buyers seek cheaper cars south of the border in Eire.

The Retail Motor Industry Federation claims that 29 per cent of all new cars registered in Northern Ireland in July were sourced from Eire and mainland Europe.

'This is happening because there is still a significant price differential between certain model vehicles in some member states of the EU, which is to the disadvantage of franchised dealers,' said Alan Pulham, the RMI's franchised dealer director.

The most recent pricing survey conducted by the European Commission revealed how stark differences in car registration taxes and VAT rates have led to sharp variations in pre-tax car prices.

A Ford Focus 1.6 three door 'Trend', for example, cost 11,497 Euros pre-tax and 17,802 Euros after tax in Eire, compared to a UK pre-tax price of 13,357 Euros and an on the road tax of 15,695 Euros. Under EC rules, Northern Irish buyers can source right hand drive cars in Eire at pre-tax prices and then pay UK taxes when they import the cars, delivering substantial savings.

'Franchised dealers in Northern Ireland have high levels of investment committed to the representation of individual franchises based on a forecast market expectation,' said Pulham.

'Today, that market expectation is being devalued by almost one third. It is essential that manufacturers and importers work with their networks in Northern ireland to bring the new car customers back to the authorised dealers.'

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