The importance of the £20 billion company car market, which excludes the contribution of servicing, maintenance and fuel, is highlighted in the Lex report, which says: 'The British car industry is increasingly reliant on the corporate sector financially and it is company car buyers that are demanding ever higher standards.
'The company car is not a perk for the vast majority of company car users. People need their cars and this makes them a soft target for taxes as people have no choice but to pay, given the benefits of the car and the lack of serious public transport.'
CHANCELLOR Gordon Brown has been issued with a 'hands-off the company car' warning in the run-up to his July 2 Budget. Roy Fewster, managing director of Lex Vehicle Leasing - Britain's largest contract hire company with more than 85,000 vehicles - has urged the Chancellor not to tamper with motoring taxes to the detriment of the company car. The plea comes as speculation mounts that company cars could be a Budget target.
Fewster said: 'We are concerned that the Government will see the motor industry in general and the company car market in particular as an easy target, because of price inelasticity to such things as fuel tax rises, and because these tax rises can be promoted under the banner of environmental piety. The company car keeps business life going and costs need to be kept down rather than raised if British industry is to remain competitive.'
He was backed by Tony Leigh, chairman of the Association of Car Fleet Operators, and Norman Donkin, secretary general of the British Vehicle Rental and Leasing Association. Leigh said: 'We would accept taxation on private mileage and higher tax on less fuel efficient cars, but any attempt to over-tax the company car will have a detrimental effect on the economy in general.' Donkin added: 'We are concerned about the environmental situation and we would be in favour of anything that would reduce the negative environmental impact of the car while recognising that 80% of company cars are essential to the work the driver is doing.'