The Society of Motor Manufacturers (SMMT) has called on chancellor Alistair Darling to use next month’s budget to kick-start sales in the new car market, saying that the UK motor industry is close to a "state of emergency".
Paul Everitt, chief executive of SMMT, said, "The UK motor industry is reaching a state of emergency and the rate of government action is crucial to the future success of the sector.
"The government must use the budget to boost consumer confidence and kick-start the market with a scrappage incentive scheme to encourage private sales and tax changes to generate business sales."
Other proposals include:
Removing or delaying the planned 2010/2011 introduction of a first-year rate of tax on new cars.
Deferring the new CO2-based business car capital allowance regime to 2010/11 to avoid tightening the squeeze on cash flow for business car users.
Delaying the introduction of the new standard Benefit-In-Kind (BIK) tax regime for the use of demonstrator and stock-in-trade cars to ease the unplanned cost adjustment burdens facing many employers and employees.
Removing the 3 per cent diesel car penalty in the company car BIK calculation.
Deferring the third stage of increases to DVLA first-vehicle registration fees.
Encouraging enhanced vehicle replacement in government departments and agencies in 2009 and 2010.