The Society of the Irish Motor Industry is calling for more scope to be given to car retailers to trade.
It follows the publication of figures which shows a drop of nearly 5% in new car sales in Donegal over the first two months of the year.
In Donegal, there were 964 new cars registered in January and February of this year, compared to
1008 in the first two months of 2020.
That's a fall of just over 4%, which is not as steep as the national fall of almost 11%.
In January of this year, 132 new Light Commercial Vehicles were registered in Donegal, five less than in January of last year, while nine new Heavy Commercial Vehicles were registered, one more than during the same period last year.
Brian Cooke, Director General of the Society of the Irish Motor Industry, says there's a challenging time ahead for the sector, particularly as higher VAT rates have come into effect this week.