The head of BMW’s British sales unit has warned of the consequences for output and employment in Britain that could result from the imposition of high taxes on top-end cars in the UK.
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His remarks follow suggestions that all three main UK political parties are considering proposals for additional taxes on cars on environmental grounds. A recent leaked Labour Party proposal touted a special GBP2,000 purchase tax for high-end cars.
Speaking to journalists at BMW’s annual press dinner in London, Jim O’Donnell warned that a determination to tax larger cars out of existence threatens the smaller manufacturers of such cars.
“I am talking specifically of Jaguar and Land Rover,” he said.
“Do our political leaders really want to kill off major contributors to the UK economy and major employers? Or is their forward planning confined to the current electoral term rather than the long term?
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By GlobalData“I don’t know the answer but I do know that poor management, unrealistic unions and the apathy of successive governments towards the industry has resulted in the demise of a once strong indigenous industry. The UK needs both Jaguar and Land Rover as strong competitors in the global marketplace.”
O’Donnell also outlined the positive benefits that high-end cars bring, including technology that filters down to volume segments.
“It is all too easy to vilify a car that emits, say, over 225gms[CO2]/km. Relatively few people drive them and they are an easy, some might even say a popular, political target. Nevertheless, I believe our political leaders need to give more than a nano second’s consideration to the positive characteristics of top-end cars.
“Such cars are not just large, they are often technology leaders – this is certainly true of the BMW 7 Series. Expensive new safety and efficiency measures tend to find their way first on to larger luxury saloons and coupes. ABS, DSC, catalytic converters, airbags, telematics, head-up displays, night vision, navigation, lane departure warning and many, many more all started in high-end models.
“As demand grows these features trickle down to smaller and less expensive cars thus benefiting the greater driving population. The enforced demise of such cars will bring a slowdown in the development of such technology in future.”
However, O’Donnell praised the UK government for its initiatives thus far in encouraging a switch to cleaner cars via tax rule changes.
“Within the EU it is fair to say that the British government was the first to put in place considered proposals to encourage a shift to lower-emitting vehicles. Gordon Brown revamped the company car tax [benefit-in-kind personal taxation] criteria…followed by altering CO2-graded VED [annual ‘road tax’] charges.
“We may argue about where levels are set, and we might well take issue with opportunistic scale charge rises, but it is basically a fair means of taxation and a good consumer guide,” he acknowledged.
Turning to the rise of environmental issues in general, O’Donnell observed how quickly the environmental agenda has moved forward over the past decade.
“The political, social and environmental issues have altered my attitudes and business behaviour enormously, as I am sure it has for all of us in so many ways. I do not regret this nor do I rail against it. We all have a duty to use resources more efficiently and it is in the best interests of our planet.”
Dave Leggett
