CO2 and fuel efficiency gains with no price changes on new automatic Volvos are set to deliver significant savings to company car drivers.

Effective immediately, new S80, V70, S60 and V60 D3 and D4 Geartronic versions will emit under 130g/km CO2, - a 4 percentage point improvement on current BIK banding. This equates to £21 per month for a 20% tax payer based on 2012/13 tax bandings, driving a Volvo V60 D4 SE LUX Geartronic.

Employers also save on class 1A NIC contributions which are also determined by CO2  emissions.

The changes have delivered an 11% emissions reduction on S60 D3/D4 Geartronic, which now produces 126g/km CO2, (down from 142g/km) and returns 58.9mpg (52.3mpg on the previous production model). These improvements have helped reduce BIK from 22% to 19% this year and to 20% for the upcoming 2013/2014 financial year.

Other models in the Volvo range that will benefit from the latest enhancements is the XC60 D4 FWD Geartronic.  Fuel economy for this model rises to 47.1mpg from 41.5mpg and it now produces 159g/km CO2, a 19g/km CO2 improvement on the previous production model. The corresponding fall in BIK sees this vehicle drop from the 29% BIK banding to 25% for the current financial year and 26% for the 2013/2014 financial year.

The vast majority of existing orders needn't take any further action as vehicles built from 11th February will automatically benefit from the CO2 and fuel economy enhancements.

Selwyn Cooper, Volvo Car UK national corporate operations manager said: "We are committed to the company car driver and we are continuing to strive to improve CO2 at every level. Business drivers are more likely to opt for automatics and we don't want them penalised by paying much higher BIK so we are doing everything we can to create vehicles that are kinder to the environment and hence, the pocket."

Below is a full table outlining the improvements in CO2, MPG and BIK across the range: