Matthew Vella
The presidents of Malta’s two car lobbies have expressed hope that car sales will turn around after a long lull in summer sales, once the new registration tax system kicks in on 1 January 2009.
Dealerships and agents speaking to MaltaToday said car sales were either “down” or “slow”, saying consumers had spent most of the year wondering when government would slash registration tariffs.
Oliver Brownrigg and William Shaw, who are respectively the presidents of the Used Vehicles Association (UVIA) and the Association of Car Importers (ACIM), both admitted sales had been low, although they told this newspaper their comments were not official statements of their associations.
Brownrigg, who represents the lobby of used car imports, said UVIA had already met with government in the hope that certain aspects of the new registration tax are improved.
Speaking personally, he said there was “not much interest right now” in car purchases, as consumers await the new year. “Some dealers are reporting car sales. But when I meet my friends, they say business is going down.”
William Shaw instead said sales were “normal”. “People are demanding the prices, they want to see what savings they are going to make, although it’s nothing spectacular.”
But even before government had announced its new car tax regime in this year’s budget, car importers were complaining of a dramatic drop in sales. The ACIM had reported drops in monthly sales, from 650 to some 250 vehicles in June and July.
Back then the ACIM had complained of lack of consultation with the finance minister, and that high consumer expectations for cheaper cars had held them back from making new purchases.
But even though Fenech has announced the new car tax regime, importers fear the transitional period in November and December will see little sales before the system comes into full force in January 2009.
Anyone who buys a car now, paying the current registration tax, will have the option of getting a refund on the tax, in the form of credits on their annual circulation tax, which will replace the old licence fee.
Buyers will be refunded the difference, if any, between the registration tax they paid in 2008 and the new tax. The difference will be offset against the annual circulation tax, until the credit is exhausted.
The catch is that if the car is resold, any remaining credit gets transferred to the next owner and not to the seller, because the credit is tied to the vehicle itself.
Even if the car is scrapped, the unused credit will be lost, and cannot be transferred onto another vehicle.
“Yes, sales decreased in 2008,” Shaw told MaltaToday yesterday, “and people are now waiting and asking. Hopefully things will get back into shape. The financial situation certainly hasn’t helped either.”

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