The Society of Motor Manufacturers and Traders (SMMT) is calling on George Osborne to announce a revised set of company car tax rates from 2015, with greater differentiation below 95g/km and significant levels of incentive for ultra-low carbon vehicles.
In its submission to the Treasury, the SMMT has also called on Government to review its Budget 2012 decision to change the writing-down capital allowance threshold for new vehicles.
However, at the core of its submission is a request for Government to ensure that key announcements in the Budget are fully aligned with industrial strategy priorities and reflect the automotive sector's drive for growth.
SMMT's interim chief executive Mike Baunton said: "The UK automotive industry works very closely with Government which, in recent years, has led to significant inward investment.
“However, we cannot be complacent. To ensure we remain one of the leading destinations for direct investment, and to build upon the commitments already made, it is imperative that the overall UK business environment is competitive and provides a distinct rationale and incentive for companies to invest.
"SMMT calls on the chancellor to spearhead a proactive government, support innovation, grow the low and ultra-low carbon vehicle market in the UK, and support opportunities in the supply chain; particularly in access to finance.
“We urge him to continue to develop the UK's flexible workforce, and importantly, we need him and his colleagues in government to provide a strong voice in Europe."
It is also asking the chancellor to ensure that Government's energy efficiency schemes are not detrimental to the UK's business environment and reverse the decision to remove the Climate Change Agreement (CCA) exemption rule from the Carbon Reduction Commitment (CRC) scheme.
In addition, the SMMT is looking for Government to support the Automotive Advanced Propulsion Centre. It wants it to ensure science and innovation funding reflects key UK industrial strengths, has a scale that is internationally competitive and is delivered through tried and tested routes such as the Technology Strategy Board or centres of excellence.
SMMT calls on Government to indicate in Budget 2013 that it supports the creation of a joint government-industry funded Automotive Advanced Propulsion Centre of Excellence.
The automotive body also wants the Government to support a stronger supply chain and commit to the Regional Growth Fund and Advanced Manufacturing Supply Chain Fund, and put them on a permanent footing - to provide confidence and support for supply chain companies.
Finally, it is looking for the Government to build upon the welcome two-year increase in the Annual Investment Allowance by making the support permanent, moving it from a short-term boost to a long-term mechanism that influences investment decisions and provides certainty and business confidence.