Buyers opt for smaller cars

Calls for the Government to dole out cash grants to encourage people to buy more economical and environmentally friendly cars come "too late," says Motor Industry Association chief Perry Kerr.

"Car buyers are astute - the market has already moved," said Kerr.

"The promise of lower fuel bills is sufficient incentive on its own for buyers to choose the most economical vehicle which meets their needs, and they are doing just that."

The New Zealand Business Council for Sustainable Development says around 60 per cent of New Zealanders back its proposal for cash grants to buyers of fuel-thrifty new or used vehicles that meet the latest exhaust emission requirements.

It wants grants of up to $3000 for climate-friendly cars - and penalties of $2000 for cars that swallow 14 litres/100km (20mpg).

"The aim is to spur a change in the one of the world's oldest and least efficient vehicle fleets, while also moving to protect the quality of life in New Zealand," says the council's chief executive Peter Neilson.

"We have become the world dumping ground for high-emission used imports.

"Why should we import vehicles you wouldn't be allowed to drive in Europe, Japan or in many states of the United States?

"Every time we take in a high-emission cast-off we're adding to our Kyoto carbon bill.

"We need to phase in Euro IV-equivalent emission standards, introduce incentives for buyers of fuel-efficient, low-emission cars - both new and used imports - to clean up the fleet.

"While petrol prices hit all-time highs, the policy will allow some car buyers to cut their petrol bills by up to half, while also helping the country lower emissions.

"The policy will also help the Government tackle its $1 billion Kyoto carbon credit deficit."

The council- whose 51-member companies include carmakers Toyota and Honda - believes its policy could see 43 per cent of New Zealand's car fleet become climate friendly over the next 10 years.

But MIA chief Kerr says new-car buyers are already thinking ahead and there's no need for cash grants or incentives.

"Sales of micro, light and small cars have grown by almost 60 per cent since 2000, and there has been a steady decline in the market share of large cars over that period," he said.

In 2003, large cars represented 25.8 per cent of the market.

This dropped to 18.4 per cent last year and 16.7 per cent in the four months to the end of April this year.

In April alone, large car sales stood at a record low of 14.2 per cent.

By contrast, micro, light and small cars went from 32.8 per cent of the market in 2003, to 37.4 per cent in 2005.

They had a 39.8 per cent share for the first four months of this year with a high of 41.2 per cent in April alone.

"The trend shows no sign of abating and clearly incentives are not required," said Kerr.

"Besides, the most popular fuel-efficient cars already have waiting lists, so any cash grants or incentives would only exacerbate that situation.

"This marked change in new car purchases is encouraging, both in terms of reducing New Zealand's oil imports and in meeting our Kyoto obligations."