The Society of the Irish Motor Industry (SIMI) says the number of new car registrations so far this year is down 80,712 - or 7.4%.

Its Quarterly Motor Industry Review also shows that used car imports for the same period are up 2.4% to 53,119.

But a projection suggests new car sales in 2020 could decline by over 9% to 105,000.

SIMI says that despite the economy performing strongly, the environment for new car sales continues to remain "very challenging."

Since the announcement of Brexit in the UK, both new cars and commercial registrations continue to decline.

However there is an exception for electric cars and used car imports.

SIMI says: "External threats such as Brexit uncertainty, greater consumer caution and the ongoing growth of used imports continue to undermine new car sales.

"Another factor dampening demand was the increase in the VRT on new cars in last year's budget, arising from the fact that no allowance was made by the Irish authorities for the first step in the move to the new WLTP testing regime."

Cars stopped at traffic lights in Germany | Image: Andreas Arnold/DPA/PA Images

Economist Jim Power, who composed the report, warns: "If the Government does not adjust VRT bands in Budget 2020 to take account of the WLTP changes, the average price of a new car could rise by at least €2,500.

"While the recently published Inter-Departmental Tax Strategy Group (TSG) paper on motor vehicle taxes makes a number of suggestions about taxation, this does not mean that these suggestions will eventually become part of Budget 2020.

"The price increase for the more popular mid-range model could rise by significantly more. In the current environment, such price increases would have a devastating impact on new car sales".

The report also highlights that the surge in used imports is continuing to displace new car sales - and is increasing the market penetration of diesel cars, while also leading to the importation of older, less environmentally friendly cars.