Carbon tax fails to convince motorists to buy greener vehicles

Cape Town-100420-The Joule, South Africa's first electric powered car on display in front of Parliament. It was developed by Optimal Energy. Picture Jeffrey Abrahams

Cape Town-100420-The Joule, South Africa's first electric powered car on display in front of Parliament. It was developed by Optimal Energy. Picture Jeffrey Abrahams

Published Oct 2, 2012

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Roy Cokayne

Motorists have failed to embrace lower-emission cars despite the introduction by the Treasury of a carbon dioxide (CO2) tax on vehicles from September 2010.

Keith Watson, the head of sales at Standard Bank vehicle and asset finance, said CO2 emissions were not a consideration for consumers in their purchasing decision.

Car sales were driven more by the aspirations of consumers than environmental issues, he said during a panel discussion on “Affordability, Choice and Demand: The road ahead for South Africa’s vehicle market” hosted by Standard Bank and Future Group last week.

Brian Smith, the head of Renault South Africa’s fleet and pre-owned division, said car sales were driven by “consumers’ pockets” and agreed that a vehicle’s emissions were not really a consideration in the purchasing decision.

However, Smith said better fuel efficiency was a key driver of lower emissions and was contributing towards greener motoring.

Derik Scorer, the chairman of the National Automobile Dealers’ Association, said consumers had a long way to go before they discriminated in favour of lower emission vehicles in their purchasing decision.

Scorer favoured an incentive for motorists to acquire low-emission vehicles rather than the government’s punitive approach and its impact on vehicle affordability.

Since September 1, 2010, buyers of new cars have had to pay R75 for each gram of carbon dioxide emitted per kilometre above 120g/km, which increased the price by an average of between 2 percent and 3 percent.

Scorer said that if the government was committed to green motoring, the income from the CO2 tax would be put into some good cause but was instead merely lost in the general revenue of the fiscus.

He also doubted electric vehicles would ever become a reality in South Africa because of the vastness of the country, although dual-powered electric vehicles with petrol or diesel as an alternative energy source might secure a small foothold in the market.

Roland Reid, the marketing director for Jaguar Land Rover South Africa, said green motoring was important globally but unfortunately the government had chosen to introduce a tax to protect the environment, which increased the cost of vehicles and was not an incentive to encourage consumers to buy greener vehicles.

Reid said the price of vehicles with an alternative fuel source had to get closer to that of cars with an internal combustion engine so consumers did not just revert to looking after their pocket when making a purchasing decision.

He said green motoring could not be encouraged by only taxing passenger cars and a more broad-based approach was required.

Reid added that the engines used by aircraft and trains emitted CO2 but were not part of the taxation system.

Gert Grundlingh, the director of automotive systems at RGT Smart, which administers the new vehicles sales statistics for the National Association of Automobile Manufacturers of SA, said on Friday that the weighted average CO2 emission levels in vehicles sold monthly was progressively declining.

But Grundlingh believed this was caused by newer car models being more fuel-efficient and emitting less greenhouse gas rather than a change in consumer behaviour.

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