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Government should further boost smaller car sales

Government should further boost smaller car sales

The Government should take its cue from the public – and provide a cash incentive to further drive up sales of smaller vehicles, the New Zealand Business Council said today.

The Motor Industry Association says sales of small cars have increased by 44% in the past year, compared with the previous six years and the trend has been strong since petrol prices started soaring. There is reportedly a six month waiting list for Toyota's Prius hybrid.

The New Zealand Business Council for Sustainable Development – a group of 51 companies whose members' $33 billion in annual sales equate to 28% of the country's gross domestic product – has put a detailed policy to the Government urging it to make cash grants of up to $3000 to buyers of newly registered fuel efficient – low emission vehicles. Buyers of gas guzzlers, using 14 litres or more per 100 kilometres would pay $2000 extra.

The council's Chief Executive, Peter Neilson, said today the Government should put a rocket booster behind the latest trend to small car sales. The country had an older less efficient vehicle fleet than most of countries. The extra incentives were needed because the country's starting position was much worse.

The policy would cost the Government $97 million a year if 40% of new car registrations are fuel-efficient/low emission.

"At the same time people would get lower car prices, cut their fuel bills by up to half, reduce emissions and help preserve New Zealand's quality of life. The Government's billion dollar liability under the Kyoto protocol would be brought down too by one of the most practical, easy, first things we can do to improve the way of life here," Mr Neilson says. "We'd like to see the policy in next month's Budget."


Examples of vehicles eligible under the Business Council's proposed grants policy:

Examples of Eligible Vehicles

(List derived from the Green Vehicle & Fuel Consumption Guides, Australian Greenhouse Office)

Vehicles eligible for $3,000 or $1,000 incentive (NZ new & used imports, respectively): Audi A4 (2L) Diesel Honda Jazz (1.5L) Petrol Daihatsu Sirion (1.3L) Petrol Peugeot 307 (2L) Diesel Holden Barina (1.4L) Petrol Toyota Prius (1.5L) Hybrid Honda Civic (1.3L) Hybrid Vehicles eligible for $1,500 or $500 incentive (NZ new & used imports, respectively): Citroen C5 (2.2L) Diesel Kia Rio (1.5L) Petrol Daewoo Lacetti (1.8L) Petrol Mazda 2 (1.5L) Petrol Ford Focus (2L) Petrol Nissan Pulsar (1.8L) Petrol Holden Astra (1.8L) Petrol Peugeot 407 (2L) Diesel Hyundai Sonata (2.4L) Petrol Toyota Corolla (1.8L) Petrol Vehicles with $2,000 or $1,000 penalty applied (NZ new & used imports, respectively): Ford Falcon XR8 (5.4L) Petrol Mazda RX8 (2.6L) Petrol Holden Commodore Executive (3.6L) Petrol Subaru Legacy (3L) Petrol Honda Legend (3.5L) Petrol Toyota Hilux (4L) Petrol

The Business Council's recommendations on price cuts for fuel efficient cars are outlined in its report "Incentivising Greener Vehicles" (available at


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