Hi There,

Its been several months since we updated our blog. We spent some time last year canvassing the government on VRT and trying to explain the negative impact that the government's decision making on VRT had on the industry and on used car values. Fortunately against all the odds, the government listened to our arguments and introduced the scrappage scheme on 1st January this year. The scrappage scheme has done everything we said it would do, it has increased new car sales, offered a good deal to consumers and increased governemnt revenues in a year when they are badly needed. However, the most important impact of the scrappage scheme is that it has changed consumer sentiment to buying a new car. It has made it acceptable again to be seen driving a new car which we see as the real benefit of the scrappage scheme. It is the first important step to the recovery of our industry and will consolidate this recovery in 2010 and plan for a further expansion of the market again in 2011.

We do have to thank the government for introducing the scrappage scheme as they really saw through the negaitive spinning surrounding it and made a decision based on good economic reasoning. If they adopt the same attitude to the difficult decisions they must take in the remainder of 2010, we can be confident that we will emerge from this recession this year.

We promise to update our blog regularly from here on and concentrate on car issues rather than politics.

The government have announced that they will introduce a carbon tax in December's budget. John Gormley has stated publicly that this carbon tax will mean an increase in petrol and diesel prices following the budget. The money raised from this tax will fund green projects in 2010 to reduce the country's carbon emissions. Mr. Gormley states that the polluter must pay. We have major reservations about the carbon tax and we believe that it is another method of taxing cars which are already severely over taxed. There are several key facts of which you should be aware

1. Cars accounted for less than 10% of the greenhouse gas emissions in Ireland in 2007. Since then there has been a significant change to greener cars with less co2 emissions mainly due to the European regulation "Clean Air For Europe" (CAFE). This will reduce the greenhouse gas emissions significantly below 10% in 2008 and 2009 and reduce them even further in the coming years.

2. What is the government going to do about the other 90% source of greenhouse gas emissions. Why do they concentrate on cars all the time. Argiculture accounts for more than 30% of these emissions but the government will not touch agriculture because of the strength of the farmer's lobby (good luck to them). Energy production (ESB) account for another 30% but they will be exempted from this new carbon tax. Home heating accounts for 10% and you can bet your mortgage that they will carbon tax home heating oil, gas, coal and turf as well as cars. They will take the soft option all the time and avoid confrontation with strong organised lobbies at all costs.

3. Cars are already excessively taxed. They have a vehicle registration tax (VRT) which is co2 emissions based (Isn't VRT isn't already a carbon tax ???) , VAT and an annual road tax charge. VRT and VAT average €7k for every new car sold in the country. The government are now adding a fourth tax on cars. When will they learn that excessive taxation doesn't work. How many jobs have to be lost and how many businesses have to close before they realise that they cannot continue to raise taxes on cars.

4. Carbon tax is supposed to be revenue neutral which we believe means that if they impose a carbon tax on cars, they should have reduced the other taxes on cars namely VAT, VRT and annual road tax. This is not going to happen. Fianna Fail will allow the Green Party to raise these carbon taxes and use the money generated to fund their pet projects in 2010. This is hypocricy at best and will make motoring in Ireland the most expensive in Europe. This could be accepted if we had a comprehensive, efficient public transport system in Ireland where we could all use the bus or train to get to work and play. However, we have the worst most disorganised most expensive transport system in Europe. They will now add significantly to the cost of movement within our little Island. It is going to cost you more to get to work, go to a match, etc. and these guys don't really care. All they care about is looking good in the eyes of their supporters no matter what the consequences are for the other 96% of the population.

We believe that this carbon tax is a sop from Fianna Fail to the Green Party. They have ruined this country by pandering to vested interests irrespective of the consequences to the majority of the population. They are not going to stop. You will pay more for petrol, diesel and home heating fuels from 9th December on to allow the Green Party to pander to its memebership. Its under the guise of a carbon tax to fool you into thinking they really care for the environment. They are really taking money out of your pocket to keep the Green Party and its 4% support base happy. When will this ever end.

We were involved throughout the Summer in liaising with the eminent economist Peter Bacon in preparing a strategic review of the Irish retail motor industry. We believed that this review was necessary as the reasons been given for the collapse of new car sales throughout 09 were not accurate. The market has collapsed to 35% of 2008 levels and you know that it is really difficult to manage such a sudden and dramatic fall in turnover while our costs remain at 2008 levels. We needed to know specifically what had caused this collapse and we needed to determine if this collapse was temporary and if not how long would it would take for the industry to recover. A group of us approached Peter Bacon to commission a report which would give the answers to these questions. Mr. Bacon agreed to complete the report on the strict condition that he maintained his independence and than anything disclosed by his research which could be damaging for the industry would be included in his final report. We agreed as we believed that an independent report would be better received and if the industry was at fault for this collapse then we would have to change to ensure that we survived.

As the consultations with Peter Bacon continued throughout the Summer, the report expanded beyond the answers to the specific questions posed above into a comprehensive strategic review of the Irish retail motor industry. The report has been completed and will be presented to the SIMI annual conference in November. We have prepared a comprehensive synopsis of the final report which you can read here. In common with the Commission for Taxation, the report recommends the abolition of VRT, a net revenue generating scrappage scheme in 2010 and changing the registration plate away from the year of first registration.

Click here to see the synopsis.

We would appreciate any comments favourable or otherwise on the content and conclusions of this report.

We traveled to Volkswagen headquarters in Wolfsburg Germany last week to receive our Service Quality Award. This is a really prestigious award and is awarded to the top 100 dealers from 29 countries in Europe from Ireland to Russia to the Canary Islands. This award is even more important as it is based on what our customers say about us. This customer information is compiled monthly by VW Germany from direct interviews of our customers. We are delighted to receive this award and would like to thank our customers for rating us in the top 100 dealers in 29 countries in Europe.

The award was presented at Volkswagens headquarters in Wolfsburg which is about 1.5 hours south east of Berlin by train. Volkswagen's main factory is located in Wolfsburg and employs 48,000 people. It's a really impressive place and is well worth a visit if your are ever in Germany. It's like a theme park for car enthusiasts. Volkswagen have developed the "Autostadt" there which includes a delivery service for new cars, a car museum, presentations of new technologies being developed especially green technologies, pavilions for all the Volkswagen brands including Bugatti (you can see the Bugatti Veron up close), a factory tour (really impressive), shops, restaurants etc. The autostadt is open to the public and is worth a visit. The picture below will give you an idea of what its like.

Volkswagen also own the Wolfsburg football team who won the German league in 2008/2009 and who will play Manchester United in the Champions league next week. Volkswagen have recently completed a new football stadium for the team which is also located in the factory grounds.

Check the Autostadt out for yourself at

http://www.volkswagen.com/vwcms/master_public/virtualmaster/en2/experience/autostadt.html

Hi There,

The Commission for Taxation recommended the abolition of VRT to be replaced with useage taxes on petrol and diesel. We welcome this recommendation as we have been campaigning for the removal of VRT for some time. The retail motor industry in Ireland has commissioned its own independent analysis of the industry which also concludes that VRT should be abolished but this analysis has reached its conclusion based on the impact VRT has on consumers and the industry. The main reasons for this conclusion is that VRT is anti consumer, anti competitive, is a barrier to entry into the market, contradicts the objectives of the EU single market, prevents Irish consumers and dealers from selling their used cars in the UK and most importantly of all is an inefficient method of taxation i.e. the cost to the general economy of the tax outweighs the revenue collected from the tax. This independent report which deals with all facets of our industry will be published in the week beginning 21st September. We will post a copy on our website for interested parties to download.

The report also urges caution on the exact method used to remove VRT. The July 08 VRT reductions caused significant disruption in the market and resulted in the value of every used car in Ireland decreasing significantly. This is a common misconception surrounding VRT. The common belief is that VRT only relates to new cars so if I am not in the market for a new car it doesn't affect me. This is incorrect, there is residual VRT in every car in the country and there are over two million cars in Ireland. Changes to VRT will effect everyone through the reduction in value of new cars and the knock on reduction in value of used cars. This is a short term consequence of VRT reductions but it will benefit everyone in the future as when new car prices are reduced, it will open up choices for consumers to purchase new instead of used, purchase a higher specification car, reduce finance payments required to buy a car etc. These benefits will be offset by higher fuel charges. Therefore, the more you drive the more you pay. It will be the use of transport not the method of transport which the Commission for Taxation is recommending taxing in the future. We believe that this is a fairer method of taxation.

Hi There,

Following our appointment as the main Volkswagen dealership in Cork City, we have today signed a lease to rent the old Quinlan Honda/Johnson and Perrot Honda premises at Victoria Cross. This premises is next door to the Wylam Chineese Restaurant and only 50 meters from our sales facility on Orchard Road. We only obtained the keys today and as the building is not currently set up as a workshop, it will take us approximately 2 months to get everything ready. We plan to be open for business in early November. This facility will enable us to offer the full range of Volkswagen aftersales services including vehicle warranty, servicing, vehicle repair and breakdown assistance. We plan to open from 8:30am to 6:00 pm six days a week, closed on Sundays. As we develop this side of our business, we will extend the opening hours to early morning and late evening opening.

This facility is a temporary facility while we seek a new location in the City. Our efforts have been unsuccessful so far so it looks like we will have to wait for NAMA to begin operations to get a suitable location. We must be the only company in Ireland who can't wait for NAMA to be established.

We will keep you informed.

Hi There,

We have introduced this blog to give our customers an insight into what is happening within Blackwater Motors and within the Irish Motor Industry. We have all experienced the effects of the current economic downturn and unfortunately for us, the motor industry has been affected worse than most. The new car market collapsed this year and the outlook for 2010 is not much better. There are specific reasons why the market has collapsed and if you wish to find out more detailed information on what really happened, click on the news and archive news section of our website where there are several long articles explaining this collapse.

In addition to the collapse in the market, we were also faced with what appears to us as a deliberate attack on our industry from politicians expecially the green party and badly informed commentators in the media. Some of you could rightly say that it is our own fault as our public image is not the best. However, most of the negative commentary is based on very old perceptions of what the industry is about. Sometimes perception and reality can be really far apart and that is true for our public perception. The modern motor industry is light years away from how we are perceived publicy and it has proved extremely difficult to change that perception to come closer to the reality of how we operate. The latest negative media comment relates to the cost of car servicing in Ireland. The headlines were based on a limited survey of 5 dealers in Dublin which is not representative of the industry and especially Blackwater Motors. We offer servicing from €99 and have really competitive prices for all the servicing work we perform. We have adopted a policy of reduced servicing costs combined with an extension of our working hours in order to offer a good service to our customers. This policy commenced in January 2008 so its not a knee jerk reaction to the current economic downturn. If you wish to find out more about our service pricing click on the special offers page of our website www.blackwatermotors.ie. Following this negative media comments, we contacted all the newspapers and radio shows and asked them to clarify the position, esentially not to tar us all with the one brush, only the Irish Sun newspaper had even the courtesy to reply. This is what we have had to deal with this year, illinformed or incorrect media comments about our industry. We reply with the correct information and the same media outlets refuse to publish our side of the story. We can accept the negative commentary if these media outlets give our industry the right to reply but this is seldom the case. We cannot continue to accept this form of treatment in the media so a group of progressive dealers have got together to do something about it. We can accept any criticisims of our industry once the full story of what has happened to our industry and where our industry is going in the future is in the public domain. We want to get our side of the story out there and let the public make up their own minds. This will be done in early September, so keep an eye on this blog for further updates.

2009 wasn't all bad. We have been appointed as the new Volkswagen dealer in Cork City replacing Turners Cross Motors. We have opened a temporary sales facility in Victoria Cross and will open a temporary service facility before the end of September. Volkswagen awarded us a European Service award which we will receive in September. This is a really prestigious award and only awarded to the top service dealers in Europe.

We will also launch the new Volkswagen Polo in October. We drove this car in Berlin recently and it really is a fantastic car, see photo below. Its looks like the new Golf both inside and out and it drives better than any of the previous Polo models. Its  a massive improvement on the current Polo which is already good car, so you can imaging what it will be like. Volkswagen will also introduce the car at a price significantly lower than the outgoing model which is really good news in these difficult economic times. Check the blog and the news section of our website for launch dates etc.

That's about it for this week. We plan to update the blog once a week and any comments will be appreciated.