Britain's car industry says the UK government needs to "improve consumer confidence" in the forthcoming Budget if the current upturn in the market is to continue.
The Society of Motor Manufacturers and Traders has issued a list of recommended measures for Chancellor Alistair Darling, who confirmed that the Budget will be held on Wednesday 24 March. These include:
Removing or delaying the planned introduction of a first-year rate of tax (VED) on new cars from April 2010
Removing the three per cent diesel car penalty in the company car benefit-in-kind (BIK) calcutaion
Deferring the third stage of increases to DVLA first vehicle registration fees
Removing the £80,000 cap on company cars that adversely impacts UK-buil premium car makers
"Government has recognised the importance of manufacturing and has signalled its commitment to working collaboratively with industry," said SMMT chief executive Paul Everitt. "This has been vital in minimising the impact of the recession on the motor industry.
"The scrappage scheme has been a lifeline for the new car market, but further measures are now necessary to build confidence and encourage new investment," he added.
The SMMT has also suggested a number of moves to "support future investment, growth and development". These include:
Delivering clarity and consistency across all vehicle tax and incentive programmes, in supporting the delivery of ultra-low carbon vehicles
Reconsidering the removal of the 20p-per-litre incentive for biofuels, due to end in April 2010, to sustain and develop the technology-neutral approach to ultra-low carbon vehicles
Greater flexibility in the Automotive Assistance Programme and more effective delivery of wider support programmes to ease access to finance and credit
"The level of collaboration between government and industry is set to increase significantly as the Automotive, Supply Chain and Technology Councils work to realise the new opportunities from the transition to a low-carbon economy," said Everitt.
"Budgetary measures that support the Councils' plans will help to signal a long-term commitment to manufacturing that will in turn boost business confidence and the attractiveness of the UK to inward investors."