BMW calls for tax cut on all eco cars

The boss of BMW Australia has called for a tax incentive on all types of affordable economy cars to accompany the free kick that miserly luxury cars received last year.

Last year the Federal Government introduced an exemption on Luxury Car Tax on cars that cost less than $75,000 and use less than 7.0L/100km and this has prompted a rush of new diesel models from European brands over the past 12 months.

Stavros Yallouridis made the comments as BMW released its latest range of diesel-powered fuel misers in Melbourne this week, starting from $42,000 (well below the LCT threshold) to create a tally of 23 models in the BMW line-up that sip less than 6.8L/100km.

At the same media function the German car maker also released its most powerful petrol V8 of all time, the 2.3-tonne X6M -- the world's fastest 4WD.

"Australian motorists should be encouraged to get into more economical cars," he said. "The Europeans do it, they have a tax structure that provides a lower tax on economical cars and a higher tax on gas guzzlers, and it seems to work pretty well," he says.

"The environment issue is here with us to stay. It's a reality. We have, if I'm not mistaken, several BMW board members attending the Copenhagen conference as we speak."

Mr Yallouridis did not define what the incentives should be, or whether it should come from lower Federal taxes or from lower State-based registration fees.

"I think it should be a combination of both," he said. "At the end of the day, the government would benefit if more people bought more efficient cars."

When asked if customers were already getting the benefit of a lower fuel bill, he said: "Yes, but the government would earn more revenue overall if it got out there and pushed a tax incentive on economical cars. That would really stimulate sales, we'd sell more new cars and they'd earn more in tax revenue.

"The Federal Government's already proved its voice has a lot of power with the 50 per cent tax incentive it introduced earlier this year on new car purchases for businesses."

Mr Yallouridis said the Federal Chamber of Automotive Industries was looking at a tax incentive proposal but as yet there has been no formal approach made to the Federal Government.

He also pointed out the safety benefits and possible reduction in the road toll if more people drove newer cars.

"This is also about getting fresh technology on the road, and getting people into newer cars with better safety features," he said.

The road toll in some states has risen this year, despite the fact that the average ages of cars has come down slightly from 10.3 in 2004 to 9.9 years according to the most recent national CENSUS population research data.

"There is a lot that can be done to reduce emissions and reduce the road toll. We should be looking at ways to do both."

The Federal Government late last year wiped the Luxury Car Tax on vehicles that cost up to $75,000 and consume an average of 7.0L/100km or less, according to the official fuel rating label.

Mercedes-Benz has up to 10 economy cars that are eligible for an LCT exemption.

A spokesman for Mercedes-Benz David McCarthy said of the BMW proposal: "The idea has some merit but if you're going to create a tax incentive for low polluters then you need to offset that with a higher tax on big polluters."

He said Mercedes-Benz presented such a scheme to the Senate Committee in June last year, before the LCT exemption was introduced on economy cars.

Fellow German car maker Audi, which in 2010 will have 24 economical cars on sale that fall below the 7.0L/100km threshold, declined to comment.

BMW this week expanded the availability of new, super-efficient diesel engines to its 1 Series and 3 Series range of cars.

The 2008 World Green Car of the Year, the BMW 118d (pictured), which is powered by a 2.0-litre turbodiesel and sips 4.5L/100km, has now arrived in showrooms priced from $42,170, alongside a twin turbo 2.0-litre turbodiesel that blends performance and economy.

Meanwhile, at the other end of the scale, the $179,900 BMW X6M powered by a twin turbo petrol 4.4-litre V8 (408kW and 650Nm) went on sale this week. With a 0 to 100km/h time of 4.7 seconds it is the world's fastest 4WD.

The first batch of cars is already sold out, pushing the waiting list to three months.

The new diesel additions:
118d hatch 4.5L/100km 105kW $42,170
123d hatch 5.2L/100km 150kW $50,790
123d coupe 5.2L/100km 150kW $57,900
118d convertible 4.9L/100km 105kW $52,900
123d convertible 5.4L/100km 150kW $67,200

320d wagon 5.6L/100km 130kW $61,500
320d coupe 5.5L/100km 130kW $67,500
320d convertible 5.8L/100km 130kW $80,400
330d coupe 6.2L/100km 180kW $94,050
330d convertible 6.4L/100km 180kW $107,050

105kW/300Nm engine is a single turbo 2.0-litre four-cylinder diesel
150kW/400Nm engine is a twin turbo 2.0-litre four-cylinder diesel
130kW/350Nm engine is a single turbo 2.0-litre four-cylinder diesel
180kW/520Nm engine is a single turbo 3.0-litre six-cylinder diesel

The world's fastest 4WD: BMW X6M
Price: $179,900.
Engine: Twin turbo 4.4-litre V8
Power: 408kW and 680Nm
0 to 100km/h: 4.7 seconds
Phillip Island lap: 1 minute 55 seconds.

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