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Market trends: Concerns for the environment

A study produced last month by the Brussels-based organization, Transport and Environment, claims that most car companies are not doing enough to meet the EU-wide target of an average CO2 output of 140g/km by 2008.

The worst performer, in terms of lowering CO2 output since 1997, is Volks-wagen, which is reducing outputs at less than half the rate needed to meet the target. Fiat is the best performer, followed by Citroën, Renault, Ford and Peugeot. Toyota, despite the hybrid Prius, is only ‘average’.

This report demonstrates perfectly the problems faced by the car industry when it comes to the environment. Statistically, the numbers quoted are correct. However, they completely miss the point.

Fiat does not do ‘better’ than VW because it is more committed to the environment. The changes in manufacturer performance simply reflect the changes in its model mix over the last few years.

Fiat now sells hardly anything bigger than a Grande Punto, hence its average CO2 figure has dropped sharply. In contrast, VW sells more large vehicles than it used to – the Touareg and new Passat being cases in point.

The report points the finger of blame at car companies, but is it really their fault? It is consumers who have gone out and bought more off-roaders and luxury cars. Within each segment, average fuel consumption has improved, often by startling amounts. However, if buyers choose to move segments, shout at the buyers, not the producers.

If governments are serious about reducing CO2, they are either going to have to make CO2 targets mandatory for each manufacturer or penalize buyers who choose thirstier vehicles.

The first option seems unworkable – sportscar manufacturers like Morgan would have to be exempt, so where would you draw the line?

Would the average be across a manufacturer or a corporation, so would Ferrari be included in Fiat?

The second option would anger motorists. Taxes would really have to reflect CO2 outputs. Is it politically possible to slap an extra £500 annual tax bill on a Range Rover? In every EU country?

What is clear is that the policy of prodding the car industry to try and solve the problem is not going to work. Consumers are responding to improving fuel economy by buying bigger cars.

Governments are either going to have to give up on the idea, or take some real action – and some real flak.

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