THE WEEK THAT WAS: CO2 clarity call
One thing became abundantly clear at the Paris motor show this week: automakers are becoming fed up with bureaucrats and government ministers using CO2 emissions reduction to further milk vehicle owners - already hard-pressed in this credit crunch - under the smokescreen of 'environment taxes'.
""Spain is especially suffering - not only from the housing crisis - but also because of new CO2 regulation that has driven a sudden market shift toward low-emission vehicles," Carl-Peter Forster, president of General Motors Europe, said yesterday in a press conference speech unlikely to have been disputed by rival automakers.
He noted that this was on top of other financial pressures on drivers, not least the soaring cost of fuel. "In Germany, over the last eight years, the cost of driving a car has increased more than the average rise in consumer prices, due primarily to increasing fuel prices - 42.5% for high-octane petrol and 76% for diesel. That's a 76% increase for the price of diesel versus 12% for the price of a car," Forster said.
He added that the result was inevitable:weak new vehicle sales which had already prompted plant closings and cutbacks by both automakers and suppliers.
The lack of clarity on EU CO2 policy was "another uncertainty that is undermining consumer confidence and purchase intentions. Stated plainly, we need action on a reasonable, results-focused, pan-European CO2 policy. Now."
Forster said GM Europe was committed to working with policy makers to support EU strategies that will quickly reduce the impact of CO2 emissions from cars.
"However, for any policy to be successful, it must enable the design and manufacture of cars that are both desirable and affordable. This is the only way we will achieve the near-term volume sales required to replace the older, high-emission vehicles currently on our roadways.
"If the CO2 policy slows or even kills demand for new vehicles, the policy actions will have failed completely by leaving the older, higher-polluting cars on the road" (he had earlier noted that 10 to 15% of cars in Germany are more than eight years old).
Here in Britain, where annual vehicle excise duty (aka 'road tax') is already set according to a vehicle's CO2 emissions (combining with high fuel prices to make some petrol-powered, high-emitting models virtually unsaleable used so the hapless owner cannot trade up to something more efficient), the latest wheeze from government ministers, who earn five times the national average salary and are transported in taxpayer-funded Jaguars (only a few have selected the Toyota Prius alternative offered largely to placate environmentalists), is to further hike high-emitters' road tax in coming years and add an extra 'environmental' 'showroom tax' of some hundreds of pounds when a new vehicle is bought.
And even owners of vehicles bought new as long ago as 2001 (when official CO2 ratings began) with emissions above 185g/km are being hit with much higher annual taxes, snaring owners of such 'gas guzzlers' as the two-litre Ford Focus, some Vauxhall Astras and even the 1.8-litre Mondeo in the chancelleor's 'stealth tax' revenue net.
Ford of Britain chairman Roelent de Waard has had enough and called on the government to re-invest some of the revenue it gets from vehicle taxes back into the industry to help develop greener technologies. He also wants more state incentives to buy environment-friendly cars.
He said: "There is a great opportunity to boost demand for greener vehicles and this can be done through vehicle excise duty and VAT [sales tax] reductions for dedicated incentives. This would be a much better way of doing things rather than just penalising people for buying less environment-friendly cars."
The US government this week approved a US$25m loan for the automotive industry to develop green technologies, a move welcomed by General Motors, Ford and Chrysler executives at the Paris show.
This contrasted sharply with proposals by the EU to penalise car companies if their average greenhouse gas emissions are not sufficiently reduced by 2012.
De Waard said: "The automotive sector needs to contribute to lower C02 and has a long history of doing so. This should be recognised. Product cycles for 2012 are already set and forcing changes at short notice can lead to consumers buying vehicles that are not fit for purpose.
"It leads to compromises and people being forced into cars that just don't suit their lifestyles. We would certainly like to see new legislation on C02 phased in over a much longer period."
And there were plenty of signs at Paris this week that the engineers - and marketers - are on the case.
As the Ford chief said, the auto industry should be concerned about reducing CO2 emissions said to contribute to global warming - 30C temperatures in my Midlands back yard in recent summers would have been unthinkable when I first came to Britain over 20 years ago - as well as the global dependence on fossil fuels.
But automakers clearly now want to see some sanity and a lot more thought put into policies dreamed up by bureacrats and signed into law by politicians.
Here in the UK, the public increasingly think governments see CO2 reduction as a great excuse for the introduction of swingeing 'green stealth taxes'. For instance, a seven-seat minivan emitting over 225g of CO2 will next year cost its owner GBP415 in annual road tax vs GBP30 for a 119g hatchback. Yet which is more efficient use of fossil-fuelled transport - the minivan carrying many people in comfort or the hatch transporting just one driver?
In the end, CO2 reduction plans, properly thought out, could well give automakers a boost. Consider what is happening in Thailand.
Finally, I should mention that US sales data for September made grim reading but GM COO Fritz Henderson, in a wide-ranging chat with just-auto, cautioned that one bad month does not a whole year make.
Enjoy your weekend,