Fleet News

Tax reforms fail to impact on small car sales

REFORM of Vehicle Excise Duty has not seen an increase in demand for small vehicles, according to manufactures. From March 1, VED will be based on carbon dioxide emissions and the type of fuel used to power vehicles.

Manufacturers say they are doing everything they can to aid fleets. A spokesman for Ford said: 'In Europe the new Ford Mondeo actually meets Euro IV emission standards but we have retuned the engine to meet Euro III emission standards because Euro IV actually produces more CO2.' Daihatsu said the reform would probably help small car sales but could not qualify the statement with any figures. A spokesman pointed out the real changes in fleet buying habits would be seen in the scramble to prepare for the April 2002 company car tax which will be based on a combination of a car's CO2 emissions and list prices.

Many Jaguar cars will fall into the highest VED band (over 186 g/km) and as a result the company is looking at measures to reduce emission levels in its vehicles. A spokesman said: 'We hope strong residual values will out weigh the negative impact of the VED reforms.'

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