The number of new cars registered in Ireland in the first half of the year has fallen by 7.4%, according to figures released today by the Society of the Irish Motor Industry.
The SIMI figures also show that the number of used cars imported into the Irish market increased by 2.4% in the same period.
The organisation has said that since the announcement of Brexit both new car and commercial registrations have continued to decline, with the exception of electric cars and used car imports.
In a statement, SIMI said that greater consumer caution and the ongoing growth of used imports continue to undermine new car sales.
Economist Jim Power has said tat if the Government does not adjust VRT bands in October's Budget the average price of a new car could rise by at least €2,500.
Mr Power also said that "based on the information available at the moment and the projections for the economy, the new car market could decline from 125,557 in 2018 to around 115,500 in 2019.
"For 2020, based on a central scenario, new car sales could decline by over 9% to 105,000," he added.
He said such a decline would have a devastating impact on many businesses and could cost jobs nationwide.
"The motor industry is in a high-risk scenario at the moment and policy makers need to be aware of the risks," he said.
The report also highlighted the surge in used imports is increasing the market penetration of diesel cars in the fleet while also leading to the importation of older less environmentally friendly cars.