26 July 2006

Media Release

Rise in small car sales hopelessly slow lane to clean air

The higher sales volumes of small passenger vehicles, driven by the fuel price hike alone, is hopelessly small if the country wants to lower fuel use and clean up the air, business leaders say.

The latest sales figures show cash incentives are a must if the country is to achieve a high-volume switch to climate friendly cars within the next five years, the New Zealand Business Council for Sustainable Development says.

The Government is now looking at the Business Council's policy proposal for cash incentives of up to $3000 for fuel efficient, low emission vehicles. The vehicles will need to meet the latest Euro IV or equivalent emission standards. The policy is supported by six out of 10 New Zealanders in nationwide UMR polling.

Business Council Chief Executive Peter Neilson says the current rate of new micro, light and small cars sales, now running at 12.6% of all new passenger vehicles, is "hopelessly low" if the country wants to effectively lower emissions, now prematurely killing more than 900 people a year and costing the country another $400 million a year to treat other victims.

"At the new rate we're selling 16,608 small vehicles a year – five times fewer than we'd selling if we had up front cash incentives for low emission, fuel efficient cars," Mr Neilson says.

Business Council research shows about 86,000 fuel efficient, low emission cars (both new and imports) would enter the nation's 2.6 million vehicle fleet each year if incentives were introduced.

Each 86,000 vehicles would save their owners a total of $727.6 million in petrol bills during their fleet life (20 years for new cars, 13 years for imports) at current petrol prices.

"With incentives, we would see 430,000 climate friendly cars enter the fleet over five years. At current sales rates the "do nothing" alternative to offering cash incentives would see only 83,000 climate friendly cars enter the fleet over five years.

"Clearly what we need is a bold move to clean up the fleet and improve the quality of life. How many more of our kids need to suffer asthma, and people over 30 die prematurely from diseases caused or aggravated by inhaling petrol particles, before we act? The bonus is also a safer fleet – and clipping the Kyoto bill through lower emissions.

"Some in the motor industry would be better not to ignore the air quality argument. Many cars being imported into New Zealand are produced in Australia to emission standards which wouldn't allow them to be sold in Europe, Japan and parts of the United States. It's high time we had an incentive to produce significant fuel efficiency and air quality results – fast," Mr Neilson says.

ENDS