Average new car CO2 has fallen 13% since 1997 and more new trucks and vans meet tough Euro 5 emissions standards.
To complement these technology-led improvements, SMMT has urged a long-term and consistent approach to taxes in a pre-budget letter to the chancellor.
“We have made significant improvements in reducing CO2 emissions and transformed the environmental impact of our products,” said SMMT chief executive Paul Everitt. “New vehicles are cleaner, safer and more secure than the models they replace. It is important that government understands these achievements and works with us to deliver fair tax measures. These can help boost cleaner-vehicle sales, but without creating damaging market distortions.”
SMMT supports incentives for Reduced Pollution Certificates for buses and trucks. This has given early adopters an incentive to buy vehicles with the latest cleanest emissions technology.
It is an approach SMMT has urged government to apply to CO2-based Company Car Tax. Currently, rates are based on a pathway of charges, rising 1% for each 5g/km CO2 increment. This linear and progressive framework has been welcomed by the industry. However, there remains a 3% surcharge for drivers who specify the cleanest Euro 5 compliant diesel cars. It is an unwelcome disincentive that must be scrapped to encourage more drivers to specify these models.
Against a background of rising costs, SMMT has cautioned against more tax raising measures in the budget.
Manufacturers, motorists and transport companies pay more than £45bn in taxes annually and fuel costs have soared 20% in the last year.
SMMT will also work closely with government, industry and other stakeholders, on lead times and penalties to ensure new car tailpipe CO2 regulations do not impose unrealistic and unnecessary burdens on UK manufacturing.
Click here to read the Used Car Expert comparison of old and new cars from the January edition of Used Car Expert magazine.