Fleet News

New report warns of emission tax disaster

FLEET sales will drop and vehicle manufacturer and franchise dealer profitability could be heading for a crash if Government plans to base company car tax on emission levels from April 2002 are implemented. The claim comes in a new report - 'Impact of Proposed Benefit-in-Kind Changes on the Company Car Market' - from motoring consultancy Mitac Performance Development.

Controversially the report claims that company car sales will drop as employees look to take cash as an alternative. However, such a claim flies in the face of the influential '1999 Lex Vehicle Leasing Report on Company Motoring' which suggests company car sales will increase in the next decade. Mitac director and report author Graham Samways said: 'A shift away from fleet sales is likely to effect the volumes achievable and the model mix of the car manufacturers selling in the UK. There would be marked swing from bigger to smaller cars and potentially away from the fleet favourite volume franchise to more niche type products.

'This move to smaller cars will potentially effect overall profitability as margins tend to be higher on more expensive products. More serious for some manufacturers will be a decline in the desirability of key product ranges - and therefore sales volumes - with the move from multiple sales to fleets to single sales to individuals.'

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