Volkswagen Group Ireland is calling on the government to extend the current VAT reduction of 23 per cent to 21 per cent, to the end of June.
The VAT reduction, which is due to expire at the end of February, aims to allow the Irish car market to counteract the negative effects of a curtailed Quarter market in Quarter One.
Traditionally the busiest and most vital quarter for new car sales in Ireland, it accounts for around 52-57 per cent of the total sales in any given year.
Volkswagen Group Ireland MD, Carla Wentzel commented: “It is essential that staff and customers alike, heed the advice of government and stay home where possible to prevent the transmission of Covid-19, which has now reached unprecedented levels.
“Limited collection and delivery of cars will continue within government guidelines at retailers, that elect to do so, and our retailers can now do the majority of the sales process, from ordering a vehicle to finance approval remotely, but restrictions will still mean a greatly reduced market, and consequently a reduction in essential tax take from our industry.
“The continuation of the VAT reduction will go some way to incentivising new car sales beyond the traditional January rush.”