Could we see Car Manufacturers lower prices to....

Drummerboy08

Eliminate VRT? Or at least try to? I was thinking about this the other night, it looks doubtful that the government will abolish VRT, so will the Manufacturers cut out, or essentially pay the VRT element on a new car?

For example,

Nissan have recently cut the price of a diesel X Trail by €7000,
Ford have cut the cost of a Kuga by €3000,
Jaguar have reduced the XF and X Type by €10000 and €5000 Respectively.

I know these price reductions were not done to cut out VRT, but it got me thinking.

Will we see the Manufacturers being proactive about increasing car sales, and cut out the VRT element or at least some of it?

Tipsy Mac

No chance, the manufacturers currently sell cars into Ireland at one of the lowest pre tax prices in the EU. Ireland is a tiny market, id say most consider it a sub region of the uk.

-Chris-

You'd also see a wholesale collapse of used car values if the new values drop again - dealers will go to the wall because their used stock is in massive negative equity and unsellable, customers would stop buying because their trade-ins are decimated in value.

It would only exascerbate the current situation.

Owen

As Chris said, the arse has already fallen out of the market here, this would further serve to finish it off.

Interestingly though, have you ever compared the price of cars in Europe, and the price of the same cars in America? I have recently, and it looks like us poor Europeans are subsidising the Yanks when we buy our cars.

Donie75

One of the lads in work was in the US over the Christmas. He said that there was a big advertising campaign going on to publicise the new BMW 7 Series. He said they list price started at $70,000, that's around €52,000. The starting price for a 7 series in Ireland is about €115,000.

Zube

Donie75 wrote: »

€52,000. The starting price for a 7 series in Ireland is about €115,000.

€115,000 is 36% VRT, so the pre-VRT price is €73000. VAT is 21%, so the pre-tax price would be €60,330.

Mailman

Ford Ka is 11,500
Fiat 500 is 13,995.
essentially the same car underneath except the Ford handles better.
biggest difference between them is that Ka has windey windows and alloys while 500 has steel rims and electrics.
Ford definitely are trying to price the Ka as low as possible to steal sales and nudge it below the Fiesta in their range.

Zube

Mailman wrote: »

Ford Ka is 11,500
Fiat 500 is 13,995.

Fiat Panda is €11,205 with the same mechanicals.

The Ka is a long way downmarket from the 500: anonymous looks, boring cabin, no 1.4 or Abarth versions.

L1011

Zube wrote: »

Fiat Panda is €11,205 with the same mechanicals.

The Ka is a long way downmarket from the 500: anonymous looks, boring cabin, no 1.4 or Abarth versions.

When did the Panda get (slightly) more expensive? Was €10,995 on the last SIMI list I had here.

The Ka is definately more comparable to the Panda than the 500 - saying its 500 based is to associate it with a newer/'cooler' car. That 11 grand Panda has electric windows in it for that too...

Mailman

The KA is comprable to the 500 Pop spec except it's ugly and doesn't have elec. windows. It's the same chassis and has the same 69bhp fire engine. The entry level panda is a 54bhp 1.1 litre engine. If you like driving the KA is better than both the 500 and Panda.

HashSlinging

yup fairly sure the only thing that would sell would be one of these.

Padraig Mor

Drummerboy08 wrote: »

,
Jaguar have reduced the XF by €10000

Are you sure about this? Same old price on the website!

Drummerboy08

I just feel that the hole has fallen out of the trade as it is. I was in Rialto Ford earlier, there was not one person in it. In Bolands in Wexford over the weekend and it was nearly as bad.

Something needs to be done to stop this, i cant see the government doing anything, so maybe the manufacturers should take some inititative? It was just an idea.

Yep, fairly sure about the XF, it was only released yesterday so i doubt the website would be updated that quick.

Martron

i cant see price changes in new car or vrt abolitions... but i would imagine people are still buying some cars.

what is the second hand market like? Are second hand cars still changing hands without the goverment making any money on it?

i know what tthe next sterp will be...... 100 euro levyt on change of ownership!!!

if no one is buying new cars ..... people still need to buy cars.... but the goverment is not making money on private second hand car sales. so if they tax the change of owner ship they will nail us there..... or am i totally off the point

Gael23

Even if they do, the trade in value of your current car will go down in proportion so the buyer will be no better off.

robbie99

We're in a recession. People are less willing/able to buy new now. Irish government and motor trade are going to have to accept that sales will be lower as a result. Aren't UK sales are down as well? There's very little (actual nothing) the motor trade can do to affect the global recession.

However, not all of the loss of sales here is due to the recession. Irish motor trade is losing out to UK imports at a greater rate than ever before. It's estimated that maybe 80,000 new cars will be registered here this year. 2006 and 2007 over 50,000 (used) cars were imported from the UK. I suspect 2008 figures when released will be much higher. With the recent falls in sterling, pretax prices of cars are currently much lower in the UK than here. The higher the value of the car, the more worthwhile it is to investigate importing from the UK. Irish people are now prepared to buy 'new' cars in the UK whereas before it was usually only used cars. I suspect that 2009 will see the first time that more cars have been imported from UK than are registered new here.

What can we affect here? VRT? The effect of changing the VRT rates was well discussed in another thread about competiveness. Reduce VRT or abolish it completely then value of secondhand cars here plummet. UK imports become even cheaper. Government loses revenue. Increase VRT then prices go up. Cost of importing rises and Irish motor trade better protected. Bad deal for Irish motorist.

Regardless of VRT, if the UK pretax price is cheaper than Ireland, there's financial incentive to import.

So what should the Irish motor trade be doing?

If I was an Irish main dealer I'd be on to the manufacturers and distributers demanding that Ireland pretax be priced no higher than UK. Pretax prices have been much lower in the US than Europe with the falling dollar for a number of years now - European manufacturers citing 'competive pressures' the reason. Sterling started its dramatic fall in Sep 07 and like with the US market, competive pressures mean that car prices in the UK will not rise any faster than UK inflation. Sterling now at 90p/euro is a 32% fall in value compared to the 68p/euro average price prior to Sep 07. Irish Dealers need to be telling the manufacturers that they should be looking at the Irish market as belonging to a bigger UK and Ireland RHD market and pricing the same. If manufacturers are unwilling to increase the UK prices in line with the rest of Europe they should lower the euro prices here to match UK. Failling to do so will kill off even the main dealers here and the manufacturers will one by one lose their foothold here as we're forced to go to UK for our cars.

If Irish pretax prices are brought in line with UK will used car values fall? Yes - but to levels no lower than UK+VRT. Will Irish second hand sales collapse due to lower trade-in values? No - the trade-up car will be equally cheaper meaning little difference in cost to change.

-Chris-

robbie99 wrote: »

No - the trade-up car will be equally cheaper meaning little difference in cost to change.

Yes, but your car loan won't shrink, you'll owe €30k and your car'll be worth €20k - the cost to change will stay the same, but most people won't be able to stomach that level of negative equity.

Some good points though.

galwaytt

Whilst manufacturer or distributor price reductions will be welcome, they simply cannot compete with the pressures of exchange rates and recession.

It isn't practical to expect business to compensate for the lunacy of Government.

And this, maybe, hopefully, is the chink in the armour, that is VRT. If sales continue to plummet, and VRT and associated VAT returns shrink, then maybe the penny (sic :rolleyes:) will drop in Kildare Street, and someone will make the connection between the existence of VRT and the non-existence of income.....

..hey, live in hope, right ?:cool:

L1011

Mailman wrote: »

The KA is comprable to the 500 Pop spec except it's ugly and doesn't have elec. windows. It's the same chassis and has the same 69bhp fire engine. The entry level panda is a 54bhp 1.1 litre engine. If you like driving the KA is better than both the 500 and Panda.

The Panda with the 69bhp FIRE engine - and a far higher interior spec - is 11,995 list price. I don't see why you'd compare it to a car thats a derivative of the car its a derivative of rather than the original car...

I've not seen an RHD Ka in the flesh yet, but I'm assuming the dash is going to be a mirror of the LHD model. Which is the dash out of a Panda, not a 500:

http://image.motortrend.com/f/11479382/112_0811_07z+2008_ford_ka+interior.jpg