[greenyes] SUVs in Europe

["Peter Anderson" <anderson@no.address>]

fyi
WALL STREET JOURNAL

In Europe, SUVs May Face Taxes
Amid Drive to Penalize Emissions

By STEPHEN POWER and JO WRIGHTON

June 30, 2004

Hulking sport-utility vehicles have come under fire in the U.S. for safety
and fuel-efficiency issues. Now they are taking some heat in Europe -- and
politicians are listening.

France, Europe's fourth-biggest car market last year, is preparing to slap a
tax of as much as ?3,200 ($3,900) on cars that emit gases believed to
contribute to global warming, a move that has stirred official calls for
similar levies in Britain, Europe's second-largest car market. In recent
weeks, London's mayor called motorists who use SUVs in his city "complete
idiots," while the Paris City Council has called for banishing SUVs to
improve traffic flow.

The potential backlash in Europe comes two years after environmental and
other advocacy groups in the U.S. targeted SUVs as wasteful gas-guzzlers
whose size and weight represent a safety threat in accidents. If carried
out, Europe's new taxes could dash the plans of several car makers,
including Volkswagen AG's Audi division and General Motors Corp.'s Opel
unit, that are preparing new SUVs to meet Europeans' increasing interest in
the roomier vehicles, while fetching higher profit margins for auto makers.

Also at risk are Land Rover, which is part of Ford Motor Co.'s Premier
Automotive Group, Toyota Motor Corp., BMW AG and DaimlerChrysler AG's
Mercedes-Benz and Jeep divisions, the top SUV brands in Europe now. "We feel
like we are under attack," said Ivan Hodac, secretary general of the
European Automobile Manufacturers Association.

SUV sales accounted for 5% of Europe's 16.5 million new-car sales in 2003,
up from less than 2% in 1990. Automotive research firm R.L. Polk Europe
expects sales to rise 46% to 1.2 million units during the next four years,
representing an opportunity in a market where auto makers have struggled to
boost profits.

In the United Kingdom, a top adviser to the Department of Transport, David
Begg, said the current average tax on SUVs of £165 ($300) annually is too
low and needs to be raised to three or four times that amount to reduce
greenhouse emissions by giving customers a disincentive for buying such
cars. The number of SUVs on U.K. roads is about 200,000, up 40% from five
years ago, Mr. Begg said. "The government's got to act for what's right for
society generally, rather than a really small percentage of car owners," Mr.
Begg said.

Europe's increasing calls for taxing SUVs contrast with the U.S., where, for
instance, SUVs used for business purposes are subject to hefty tax
deductions, not tax levies. In Washington, congressional efforts to raise
fuel-economy standards often have failed.

Moreover, while the Bush administration has proposed raising average
fuel-economy standards for light trucks modestly -- to 22.2 miles a gallon
for model year 2007, from 20.7 mpg in model year 2004 -- it has run into
resistance from SUV enthusiasts more recently over a proposal to tie
fuel-economy standards to weight, with higher standards for the heaviest
vehicles.

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_________________________
Peter Anderson, President
RECYCLEWORLDS CONSULTING
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