The predicted drop in new vehicle registrations was every bit as devastating as had been anticipated, with sales during January down almost 76 per cent on the same month last year.

In total, 15,929 new vehicles were registered last month, in comparison to the 47,609 achieved in January ’08.

In reaction, the Society of the Irish Motor Industry (SIMI) has called for Government intervention in a bid to bolster the industry and avoid further closures and lay-offs.

“Poor figures for January are of little surprise given the current state of the global economy and weak consumer confidence,” said SIMI Director General Alan Nolan.

“There is movement in the used car market and our members are diversifying their businesses and responding to demand for servicing and parts, which is a logical shift in business given the increasing numbers keeping their cars for longer.”

Added Mr Nolan: “It is crucial at this point that the Government supports the industry and takes real and immediate action to boost the industry and prevent the potentially devastating consequences of continued decline.”

Two years ago, the Vehicle Registration Tax and Value Added Tax generated by new vehicle registrations totalled €2billion. This fell to €1.5billon in 2008.

The SIMI believes that unless action is taken swiftly by the Government, VRT and VAT revenue for 2009 could drop as low as €500million, a snapshot of Brian Cowen’s current predicament.

There is, however, some light at the end of the tunnel for auto traders. Demand for used cars has been encouraging, while dealerships have also reported increased activity in ‘aftermarket services’ – parts, servicing, etc.

Interestingly, the decrease in both oil prices and interest rates has proven of “little assistance” to the industry.

Light Commercial Vehicle registrations for January have fallen by 80.55 per cent on the same month in 2008, with Heavy Vehicle (HGV) registrations down 67.4 per cent for the corresponding period last year.