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Suzuki calls for green incentives

Efficient: The forthcoming Suzuki Alto almost matches the Toyota Prius in CO2 emissions.

Japanese small-car maker urges government green-car incentives at low end too

2 Apr 2009

SUZUKI Australia has attacked governments at all levels in Australia for what it claims is a lack of incentives for buyers of affordable ‘green’ cars.

In a wide-ranging green-car policy release issued on April 2, the resurgent Japanese small-vehicle importer, which will launch Australia’s first light-light-sized car in the new Suzuki Alto in August, has proposed a range of measures to stimulate the growth of fuel-efficient vehicle sales.

Apart from calling on the Australian government to extend incentives for buyers of fuel-efficient vehicles beyond the ‘green vehicle’ concession within the luxury car tax (LCT), Suzuki’s release is designed to stimulate debate about what constitutes a ‘green’ vehicle.

Suzuki Australia general manager Tony Devers said all levels of government should offer incentives to make ‘globally efficient’ cars cheaper for all Australians, including CO2 emissions-based tax breaks, a scrappage scheme and even a first car-buyers grant.

“Compared to what’s happening in the rest of the world, the lack of policy and direction in Australia is hard to fathom,” said Mr Devers, who criticised the fact that vehicles that cost less than $75,000 and return fuel consumption of better than 7.0L/100km are exempt from LCT.

“As it stands in Australia at the moment, the only customers who can benefit from a decision to purchase a more fuel efficient car are those who can afford vehicles costing between $60,000 and $75,000, with the price of a BMW 5 Series diesel dropping from $81,000 to $76,000.

“Where is the incentive for people wanting to purchase a much less expensive car that’s good for the environment? It is remarkable that customers shopping at this end of the market should not be rewarded for thinking with their conscience, as well as their wallet.”

Mr Devers said Australia, like many countries in Europe, should define a ‘green’ car as one that emits less than 130 grams of CO2 per kilometre, and provide tax concessions for those who buy them.

“Look at what’s happening around the world – in countries like France, Belgium and Italy – where bonuses exist for cars emitting less than 130g/km.

“We call on the government to use that figure, defining a green car as one with CO2 emissions of 130g/km or less.

“It’s time to get serious about greening the industry by linking subsidies to efficiency standards and supporting environmentally friendly vehicles like Alto with real benefits through taxation changes.”

Mr Devers said Suzuki’s forthcoming Alto, which could be the first in a flurry of new model releases in the micro-car vehicle class – or A-segment as it’s known in Europe – to arrive here, would be Australia’s first genuine green car for around $13,000.

If the Alto proves popular, it could be followed by the new Spark from Holden, the second-generation Ka from Ford, the ground-breaking iQ from Toyota and the i10 from Hyundai. At least two more city-cars could be on sale here this year, in the form of the Great Wall Florid and Chery A1 from China.

30 center imageThe Indian-built four-seat Alto hatch will come with a 50kW/90Nm 1.0-litre three-cylinder engine that emits just 113g/km and returns average fuel consumption of 4.8L/100km, making it almost as efficient as Toyota’s pioneering Prius hybrid.

Australia’s most economical car currently is the new Mini Cooper D turbo-diesel ($33,750), which returns 3.9L/100km and emits 104g/km. For around the same price, this year’s next-generation Prius will match that fuel consumption and set a new emissions benchmark of about 89g/km.

But Suzuki points out the 3.5-metre Alto, which made its local debut at last month’s Melbourne International Motor Show and will slot in beneath the $14,490 Swift in the range, costs less than half the price of similarly-efficient models but will still come standard with six airbags. Electronic stability control will be an option. The most frugal Swift returns 6.7L/100km.

Mr Devers stressed that Alto buyers would not only reduce their greenhouse gases (presumably if they no longer drive a less-efficient vehicle), but also their running costs.

“In Australia, the most recent ABS Survey of Motor Vehicle Use revealed the average motorist emits 250 grams of CO2 – or five ‘black balloons’ of harmful greenhouse gas – for every kilometre driven.

“The industry average for Australian motorists is 15,000km per year, equating to 75,000 balloons.

“Alto emits just 113g/km – or just over two balloons. Over a year of travel, Alto will produce 30,000 balloons or around 60 per cent less.”

Mr Devers said the Alto’s remarkably low emission figure was matched by its frugal fuel consumption.

“The ABS survey showed the average Australian fuel consumption is 11.5 litres of fuel for every 100km, while the Alto uses just 4.8.

“Over one year of travel, that means the average car will consume more than 1700 litres of fuel while Alto will use about 700 – again around 60 per cent less.

“At today’s price of $1.20 a litre, that one year of travel will cost the average motorist $2040 while an Alto driver will only have to spend $840.

“We could see a fleet of vehicles with the latest technology in safety and ultra low emissions, while also providing a much-needed stimulus for the automotive market.”

Mr Devers joined the chorus of calls for a nation-wide vehicle scrappage scheme like those operating successfully in Europe, which promote the purchase of new, more efficient vehicles by offering cash bonuses for used vehicles to be recycled.

Such a system already has been deemed too costly by federal industry minister Kim Carr, who said his government’s additional 30 per cent tax depreciation allowance for business buyers would be more effective in stimulating new-car sales.

“The German government offers private consumers up to $5000 towards the purchase of a new car if they trade in an old car aged nine years or more," Mr Devers said.

“That resulted in a sales increase of nearly 22 per cent in Germany in February, providing a much need fillip for the industry, while ensuring more environmentally efficient vehicles were on the road.

“Australia statistically has one of the oldest vehicle fleets in the world, offering real potential for this type of scheme to work here.

“Mr Carr believes a government tax break for business buyers is a more effective incentive. But how does that help low-income earners?“Low income earners are particularly affected by petrol price increases, as they typically live in outer suburbs and are dependent on their car for transportation.

“The Future Fuel Forum revealed that oil price increases will add around $200 to weekly fuel bills in the next 10 years, exacerbating the situation for low-income consumers.

“Adding incentives to purchase low cost, low emission vehicles like the Alto not only help protect low income earners from price increases but also helps them contribute to decreasing their carbon footprint.”

Mr Devers said that if the German experience was replicated in Australia, a scrappage scheme could be self-funded by a 20 per cent increase in government revenue via GST and stamp duty.

Suzuki has also called for a ‘first green-car owner’s scheme’, which he said could save lives as well as reduce greenhouse gases by promoting the purchase of newer, safer vehicles.

“We’ve all seen the benefits to the building industry as a result of the first home owner’s scheme, which contributes up to $21,000 to first home buyers.

“If the government was serious about making environmentally efficient cars more appealing, why don’t they consider a similar scheme for first car owners?“By linking the scheme to cars that meet the 130g/km criteria, this scheme has enormous potential to not only lower our greenhouse gas emissions, but to also help save the lives of hundreds of young Australians.

“Last year, drivers aged between 18 and 25 made up nearly 30 per cent of all fatal crashes, despite representing only 14 per cent of all drivers.

“One of the acknowledged factors in many of these crashes is the fact young people traditionally drive older vehicles, most of them lacking advanced safety features such as side curtain airbags or electronic stability control.

“Making fuel efficient cars with high safety levels more financially attractive with a bonus – like the home owner’s scheme – addresses two major issues.”

Mr Devers said both the government and every car-maker with a low-emission vehicle – not just Suzuki – would benefit from CO2-based incentives such as tax breaks, recycling schemes and first car-buyer’s grants.

“Most manufacturers have an ultra-low emission car like Alto in their global portfolio that could be available to Australian consumers.

“Again, with an increase in new car sales, tax revenue is also increased, along with GST on accessories and other associated services.

“At Suzuki, we believe the best way to broaden the choice is for all levels of government to maximise the potential by offering real incentives,” said Mr Devers.

Read more:

Melbourne show: Suzuki specs Alto

Suzuki’s Alto on the up


The Road to Recovery podcast series


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