August 2008

Cert no. SGS-COC-0620 A REVIEW OF THE PASSENGER CAR MARKET IN THE UK THROUGH HISTORY TO THE PRESENT

DRIVENwww.energysavingtrust.org.uk

Consumer Car Choices and CO2 Passenger Car Market Smarter Driving Trends of the Last Decade THE EXPLOSION OF THE MOTOR CAR

Energy Saving Trust, 21 Dartmouth Street, London SW1H 9BP Tel: 020 7222 0101 Web: www.energysavingtrust.org.uk CO151 © Energy Saving Trust August 2008. E&OE DRIVEN A review of the passenger car market in the UK through history to the present CONTENTS ENERGY SAVING TRUST The Energy Saving Trust is one of the UK’s leading organisations tackling climate change. Funded by Government and the private sector, we are a private not-for-profit limited company with offices in England, Scotland, Wales and Northern Ireland. Our purpose is to help reduce carbon dioxide (CO2) emissions through energy efficiency and renewable sources of energy in the home, on the road and in communities. Since the Energy Saving Trust was established in 1993, through our initiatives we have funded or influenced the installation of sustainable energy measures which over their lifetime will lead to savings of over 100 million tonnes of CO2.

We are perhaps best known for our work on energy efficiency, where our national network of 3 advice centres engages with over a million customers per year. We also have a significant portfolio of transport services, including 1 Executive Summary 4 6 Smarter Driving 24 consumer transport advice (such as low-carbon car purchase and smarter driving advice) provided 2 Introduction 5 7 CO2 Legislative and Policy through our advice centres, business transport 4 3 History – The Explosion Developments 26 advice for fleets and a low-carbon research and of the Motor Car 6 8 Consumer Car Choices development programme. In Scotland, we also provide a travel planning service on behalf of the 4 The Evolution of the Car and CO2 30 Scottish Government 1. 1970s to the present 8 9 Conclusions and Written by David Kenington 5 Passenger Car Market Trends Recommendations 32 Produced by Matthew Robinson of the Last Decade 12 9.1 Recommendations for With thanks to: Jamie Beevor 5.1 Market Overview 12 Government and the Nigel Underdown 5.2 Super Minis 14 Energy Saving Trust 34 Paula Owen 5.2 5.3 Small Family Cars 9.2 Challenges for Caroline Watson Bob Saynor (Lower Medium) 16 Manufacturers 35 5.3 Family Cars 9.3 Final Summary 38 (Upper Medium) 17 5.4 Executive Cars 18 5.6 Sports Cars 19 5.7 SUVs 20 6 5.8 Luxury Saloons 21 5.9 Multi Purpose Vehicles (MPVs) 22

1 This is an Energy Saving Trust publication. All views expressed within this report are those of the Energy Saving Trust and are not intended to represent the views of Government. All numbers and statistics were correct at the time of publication, however as many areas are evolving, numbers and projections are subject to continual review.

2 DRIVEN DRIVEN 3 1. Executive Summary 2. Introduction 1 2

EXECUTIVE SUMMARY INTRODUCTION

limate change is now The main reasons for current poor vehicle models of vehicles which are already n the UK, there are more than 26 million new technologies are still a long way from accepted as one of the choices are: available on the market. cars on the roads. There are more cars market4. How can these emissions be greatest challenges facing • Lack of awareness of independent than there are households, or one car significantly reduced in the near term? mankind today. The time information and advice which makes CO2 Funded by the Department for Transport and I for every two people. for talk is over. The focus is information clearer and more prominent the Scottish Government, we have recently This review is the latest in a series of market now on taking action to throughout the vehicle purchase process and started to provide consumer transport advice The car has been one of the most pervasive review documents from the Energy Saving Cdeliver the CO2 savings needed to meet so can encourage consumers to take action. through our network of advice centres. These inventions of our time and our enduring love Trust5 assessing high energy-using markets in our reduction targets. • The current market structure, where more focus on helping consumers to purchase affair with it dates back to its invention in the terms of CO2 emissions, exploring major desirable cars within vehicle model ranges lower-carbon vehicles, to drive their cars late 19th century. Particularly since the Second trends and the opportunities for reductions In the UK, the transport sector produces tend to have higher CO2 emissions. more efficiently and to use their car less. World War, the car population has exploded, in CO2. In this report, we review the nearly a quarter of our total CO2 emissions, to the extent that there is now one car for development of the new car market in the with 57 per cent of those emissions directly This is an encouraging start, because this every two people, or more than one car per UK throughout recent history to the present attributable to the passenger car. Whereas review shows that advice for consumers will household in the UK. and assess the impact of this development on emissions from most sectors have been Car buyers are making play a crucial part in delivering these reductions. CO2 emissions. The aim of this report is to: decreasing, transport emissions have significantly Information alone is not enough and little While CO2 emissions from other sectors have increased since the 1970s. This is a review of poor choices when it comes proactive advice is provided at the moment. largely been decreasing, the opposite has • Explore the development of the new the development of the passenger car market in to the CO2 emissions of been the case for transport, where emissions car market in the UK through history to the UK through history and its associated CO2 There is much greater potential for CO2 have risen significantly since the 1970s. the present. emissions, undertaken to help understand how their new cars. This means savings to be made through scaling up these This has been a direct result of our desire for • Improve understanding and awareness of we can reduce CO2 emissions most effectively in there are opportunities to services and working increasingly with local more cars and other forms of transport. where CO2 emissions are produced within the the future. delivery partners. So the main action As car numbers have grown, so have their new car market by analysing emissions from reduce CO2 emissions by recommended in this review is to increase negative impacts and recently, the impact each segment of the passenger car market. The new car market is complex and made up the level of independent, proactive, in-depth of automotive CO2 emissions has risen to the • Through this analysis, explore the opportunities of a number of very different sub market up to 25 per cent – simply advice for consumers from 2009/10. top of the agenda. available to reduce emissions through segments, each contributing to the overall CO2 by improving new delivering ‘energy efficiency’ in the car market. emissions figure. Understanding the true Our current turbulent economic situation and Transport is now one of the most significant • Make recommendations for action in order to nature of its CO2 impacts and identifying the vehicle choices very high oil prices mean that reducing road producers of CO2 emissions worldwide. deliver significant CO2 reductions from the best opportunities for reductions requires transport costs is going to be high on In the UK, transport is now responsible for new car market in the near to medium term. detailed analysis – which this review provides. householders’ agendas. We believe that 25 per cent of all UK CO2 emissions, with In this review we find that there are a scaling up advice services will encourage nearly 60 per cent of those emissions directly The report focuses on highlighting the To date, the passenger car market has been number of significant opportunities that people to act, because our advice will help attributable to the passenger car. opportunities to make CO2 savings using slow to respond to the problem of climate could reduce new car CO2 emissions by up significantly reduce these costs as well as existing technologies in the market – i.e. change and there is a very large range of CO2 to 25 per cent in the short to medium term. saving CO2. So the problem of car-related CO2 emissions is through ‘energy efficiency’ means. This is emissions within the choice of new cars This is equivalent to the annual CO2 clear. Unfortunately, solutions delivered by because ‘new’ (i.e. non petrol or diesel based) available to buy in the UK today. We find that emissions of a third of a million houses, However, advice alone will not deliver the low-carbon vehicle technologies are expensive consumers are currently making poor choices or a city the size of Glasgow2. potential for CO2 reductions in the new car and still far from being competitive in the when it comes to the emissions of their new market. Manufacturers also need to work hard to market. There is a need to reduce emissions cars, despite there now being good incentives Importantly, these reductions can be achieved improve the quality and desirability of traditionally While CO2 emissions from road transport significantly in the near to choose low CO2 vehicles. This is not only without the need for new technologies, fuelled low-CO2 models within their vehicle from other sectors have term – and there is an opportunity to achieve having a negative effect on CO2 emissions which are still some years away from ranges in order to improve sales. Finally, further up to 25 per cent reductions using petrol and from the market, but is also bad for consumers’ achieving real market success. The main development of government CO2-reduction largely been decreasing, diesel technologies now. pockets in terms of unnecessarily high fuel and course of action is to help consumers to policies also will play a fundamental role in the opposite has been the running costs. choose the traditionally fuelled3, lower-CO2 delivering a low-carbon car market in the future. 4 Energy Saving Trust (2007) Market Transformation Model case for transport www.energysavingtrust.org.uk/aboutest/publications/index.cfm?selTopic=172 2 This refers to household emissions only 5 Energy Saving Trust (2007) Rise of the Machines www.energysavingtrust.org.uk/ 3 i.e. petrol and diesel uploads/documents/aboutest/Riseofthemachines.pdf

4 DRIVEN DRIVEN 5 3. History – The Explosion of the Motor Car 3

The level of growth in THE road vehicles has had a EXPLOSION deeply worrying effect on the CO2 emissions OF THE MOTOR CAR from transport

lthough there is no Figure 3.3: Registered Vehicles and Households in Great Britain 1950-20067 straightforward answer to Effect on CO2 emissions who invented the automobile, Car growth has had a very significant effect on 30 with first designs tracing back the CO2 emissions from transport. Almost every as far as Leonardo da Vinci, sector, including the energy industry and Athe first true gasoline-powered vehicle is households, has decreased emissions significantly 25 generally regarded to have been created since the 1970s, with the exception of transport.

hicles Ve GB Households by Karl Friedrich Benz6 in 1885/6. Its emissions have increased, largely as a result of continued growth in the passenger car sector 20 There are very few inventions which have so (Figure 3.4). GB Private cars successfully met human needs as the motor car, 15 providing the freedom to be able to make With current petrol and diesel technologies s, Household s, door-to-door journeys whenever and wherever destined to remain the main motive power for cars required. The car itself has changed very little over many years to come, it will be impossible to 10 as a functional entity since its invention. Cars in eliminate CO2 emissions from cars in the near the late 18th century generally had four term. At face value seems it very difficult to reduce opulation, wheels, an internal combustion engine, seats CO2 emissions, as this is the major waste product Registered in the UK (Millions) 5 and controls, exactly as they do today. The key from burning petrol or diesel. GB P change has been a sustained explosion in the 0 number of vehicles on our roads. Figure 3.1 one of The following sections look at new car purchase Karl Friedrich Benz’s 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 trends in relation to CO2 emissions, which Year After World War Two, Great Britain saw the first automobiles highlight some of the major opportunities for start of massive growth in its car population. achieving near-term reductions. However, first Figure 3.2: Private and Light Goods Vehicle Registrations (1950-2005, DfT Statistics) Figure 3.4: Total UK CO2 emissions and CO2 emissions from Transport 1970-2005 Figure 3.2 shows that new vehicle registrations we look at how the car itself has evolved over increased nearly 20-fold between 1950 and the past 30 years and how this has affected 800 2005. Figure 3.2 also clearly suggests the 3 CO2 emissions. Total including Land use, 700 extent to which the car has been both a cause Early 90s Recession Land use change and and an effect of post-industrial economic 2.5 Forestry (LULUCF) growth, indicating how important the car has Early 80s Recession ) 600 2 become within modern life. 1973 Oil Crisis 2 500 Growth in the numbers of cars in the UK has been so strong over the past 50 years that by 1.5 400 the early 2000s, the number of cars in the UK overtook the number of households for the 300 Emissions (MtCO

1 2 first time (Figure 3.3). ● Energy industries CO ehicle Registrations (Millions) 200 V 0.5 ● Passenger cars ● Road transport

New 100 ● Other – transport 0 0 1951 1956 1961 1966 1970 1975 1980 1984 1989 1994 1999 2004 6 Karl Benz produced his first car, a three wheeled gasoline powered internal 7 DfT and CLG Statistics http://www.communities.gov.uk/housing/housingresearch/ 1970 1975 1980 1985 1990 1995 2000 2005 combustion engine car. Karl Benz went on to found the Benz company, precursor to Year housingstatistics/livetables/ Year Mercedes-Benz (Daimler Chrysler) 8 Defra 2006 – http://www.defra.gov.uk/environment/statistics/index.htm

6 DRIVEN DRIVEN 7 4. The Evolution of the Car: 1970s to Present 4 To further compound the issue, many of the Table 4.1: Indicative Passenger Car Features and Options 1978 and 2008 features shown against the 2008 ‘indicative’ vehicle also directly worsen fuel consumption 1978 2008 because they need power in order to operate. (See Table 4.1) This extra power requirement is Standard features Optional features Standard features Optional features supplied ultimately from the engine, which has Console warning Mud flaps Power steering Trip/fuel/temperature to work harder to operate these power hungry indicators Sunroof Console warning computer devices13. The most significant examples are air Air recirculation Cassette player indicators Rain sensitive conditioning and climate control systems, Radio Rear speakers Heated door mirrors windscreen wipers Rear parking sensors which can increase fuel consumption by as 2 speakers 60/40 folding rear seats Electrically adjustable door 1970s 1980s 1990s 2000s Heated rear windscreen Rear seat belts mirrors Electrically foldable door much as 30 per cent when set to the maximum Anti roll bar Rubber floor matts 12 Volt Auxiliary Power mirrors cooling setting14. Other power-sapping features Front seat belts Cup holder(s) Socket Electric sunroof include satellite navigation, multifunction in-car Seat belt force limiters Leather seats Air recirculation Headlight washers entertainment systems (such as CD multi- Rear fog lights Alloy wheels Pollen filters/active carbon Satellite navigation Cigarette lighter filters system changers, DVD players etc.), heated windscreens Interior light Air conditioning Hands free telephone and mirrors. Unlike air conditioning, these Front cup holders systems (e.g. Bluetooth features reduce efficiency by requiring the engine Cooling glove box capability) to charge the battery more via the alternator. Front electric windows Electric seat adjustment Vehicle weight has Rds stereo radio Quick clear heated The CD player/changer windscreen EVOLUTION It is unlikely that these options and features will Remote audio controls Emergency brake assist be removed from cars in future, because to a actually increased 6 speakers (4 front 2 rear) (eba) large extent they have become a driver 60/40 rear folding seats TV/DVD player of the Car: 1970s to Present by 30-40 per cent Rake and reach adjustable Cruise control expectation. So it is clear that if CO2 emissions steering column Rear electric windows are to be reduced using current vehicle between the 1970s Heated rear windscreen Leather seats technologies, one of the main challenges for and the present Service interval monitor MP3 connectivity n most markets, products usually The miraculous growing car? Furthermore, safety has become a much higher manufacturers is to produce lighter vehicles, Remote central locking Alloy wheels Additional front (full become more efficient as they Clearly, as more energy is required to move priority recently as traffic levels have increased. with more energy efficient features. Driver airbag Front passenger airbag beam) spot lights evolve over time, reducing in size greater mass, weight is the most fundamental As a result, features, options and safety Driver and front and providing more output whilst factor determining the CO2 emissions of cars. equipment have proliferated. Another trend which corroborates the weight passenger side airbags requiring less energy to operate As a result, it would be natural to expect that gain findings is that vehicles have got Rear passenger side (e.g. mobile phones). However, the weight of vehicles would have reduced Shown in Table 4.1, these have added a huge significantly larger over time, as shown by Paul airbags Anti lock brakes (abs) Ithe evolution of the car has been complex, over recent years as fuel efficiency and amount of weight to cars, resulting in the trend Neiuwenhuis’s paper on ‘the miraculous trend for cars to ‘mature’ over time in order to Anti roll bar affected by many market and non-market reduction of CO2 emissions have become illustrated in Figure 4.1. growing car’15. On average, ‘like-for-like’ cars attract return buyers as they progress through Immobiliser drivers – and as a result it has not followed higher priorities. have increased in volume by 21 per cent since different life stages. One of the major ways in Alarm this trend. In fact, it has done the opposite Clearly a significant proportion of this weight 196516. This is because of the need to which this is achieved is by allowing car models Side impact protection beams as cars are larger, heavier and more Unfortunately, there is a surprising lack of gain has been the result of impressive accommodate extra equipment and also the to grow when a new model is released. Front seat belts powerful than they have ever been. data available on vehicle weight trends across developments in safety features12. Action on Rear seat belts the passenger car market. In spite of this, reducing CO2 emissions from cars should not Load limiting Steering One of the interesting aspects of the evolution some studies show that vehicle weight has compromise vehicle safety and so this Figure 4.1: Changes in average vehicle CO2 emissions, power, engine capacity and Column Clutch and brake pedal 11 of the car is the lack of significant change it actually increased by 30-40 per cent between proportion of weight gain must be viewed in weight (1995-2004, indexed to 100 in 1995) intrusion prevention has undergone. This is testimony to how the 1970s and the present.9 10 Figure 4.1 context. However it is clear that if vehicle system good an invention it really was: it has been provides a useful comparison between the weight had not increased as it has, vehicle CO2 130 Deadlocks difficult to make fundamental improvements. development of weight, power, engine capacity emissions could have decreased much more Active safety front seat Power head restraints Unfortunately, this has meant that the 2 and CO emissions of the passenger car from significantly than they actually have – possibly Reinforced safety cell negative impacts associated with cars have 1995 to 2004. by as much as 30-40 per cent. 120 Child seat restraint system also not changed (e.g. CO2 and other tailpipe Height adjustable seat belts Seat belt force limiters emissions) and the explosion in vehicle To explain this weight increase, a look at the Weight numbers has turned these issues into chronic features and options available on vehicles in Front fog lights 110 Rear fog lights problems which now require urgent attention. the 1970s compared to those available today is Boot load instructive. Table 4.1 shows an indicative list of compartmentaliser However, to state that the car has not changed standard vehicle features and options available Index Engine capacity Rubber floor mats 100 at all through recent history would be far from on a 1978 car compared with a 2008 model. Cigarette lighter Rear head restraints the truth. The car has developed significantly, Interior light but in more subtle ways, explored here. This highlights one of the main areas where Reading lights vehicles have developed significantly over the 90

C02 13 Usually via the alternator, which recharges the car battery (with the exception of 9 Carslaw, D. C., (2006) A heavy burden for heavy vehicles: Increasing vehicle last 30 years. As cars have grown in number air conditioning) weight and air pollution. Atmospheric Environment 40(8), pp.183-184 http://eee. and people have been spending increasing 14 Barbusse S., Gagnepain L. (2003). Automobile Air conditioning Its Energy and leeds.ac.uk/CO_workshop/Carslaw.pdf amounts of time in them, manufacturers have 80 Environmental Impact. ADEME http://www.ademe.fr/anglais/publication/pdf/ 10 Wells P & Nieuwenhuis P (2002) ‘Weight and the future of automotive clim_auto_gb.pdf sought to make them safer and more pleasant 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 materials’, Automotive Environment Analyst, Issue No 93, November, 22-24 2008 15 Neiuwenhuis, P. (2006). The miraculous growing car. Automotive Environment 11 ACEA (King Review Part 2, 2007) places to be – like ‘homes from home’. Year Analyst, Issue 130, May 2006. 12 Driven by improved safety legislation, and consumer demand 16 E.g. Ford Escort of 1965 compared to the 2008 Ford Focus

8 DRIVEN DRIVEN 9 4. The Evolution of the Car: 1970s to Present

Engine developments Engine technology is a key area where there Despite heightened media attention, the real on low-carbon technologies as being the has been a continuous, gradual improvement Diesel sales now account level of market success of these technologies to solution to car-related CO2 emissions. This is in fuel efficiency. As a result, engines are date has been miniscule (sales in 2007 clearly not wasted effort, as technological approximately one-third more efficient than for 40 per cent of the comprise less than 0.7 per cent of the total solutions are the key to de-carbonising the car thirty years ago. However, as noted previously, whole new car market market). In fact, the only technology which has market in the long term. However, to date the this improvement has been offset significantly shown any significant promise both in terms of effect of this has been that some other by a similar increase in the weight and size of CO2 reductions and market sales is hybrid opportunities available to reduce CO2 through cars. Furthermore, as Figure 4.1 (page 9) electric. This technology has been pioneered by improved use of existing technologies have shows, engines have also got much more Finally and more recently, there has been an Japanese manufacturers such as Toyota and not been acted on fully. It is clear that these powerful, which has had a further negative increasing trend for the diesel engine to be Honda – with cars like the Honda Civic IMA opportunities now need to be explored fully impact on CO2 emissions. As a result, used in higher performance vehicles where it and the Toyota Prius – and is essentially a in order to deliver CO2 reductions in the improvements in fuel efficiency and CO2 has been found to be a very viable application21. ‘stepping stone’ solution, still fundamentally nearer term, so that road transport can play emissions have been much smaller than the This has resulted in an actual increase in new dependent on the internal combustion engine. its part in the Government’s overall CO2 potential over the time period. diesel car CO2 emissions since 2002. This means reduction targets27. CO2 emissions from the new car market have There are a multitude of reasons behind the Because the nature of the internal combustion only reduced because consumers have bought poor performance of these technologies in We believe that significant near-term CO2 engine constrains the level of possible fuel weight. Unfortunately though, these are increasing demand for fuel efficiency in certain many more diesels - which are generally lower terms of sales; however it is principally the reductions can be delivered through improving efficiency, existing engine technology has relatively expensive applications and as a result, parts of the market) have meant that demand CO2 than petrols - not as a result of result of an inability to compete effectively with our choices of vehicles, as there is a very wide diminishing potential for further improvement. turbo and supercharging for petrol engines has for diesel-powered cars has taken off over the improvements in diesels themselves. This has petrol and diesel vehicle technologies because range of CO2 emissions in the cars available on However, there are a number of developments generally been applied only to expensive, last 10 years, with sales nearly tripling over the very worrying consequences for continued CO2 of high production costs and relatively poor the market today. The following section which have helped improve efficiency over the high-performance vehicles, again to increase decade. Diesel sales now account for 40 per abatement in the market. driving performance. In the absence of very examines the current car market in detail in years, noted below. performance rather than fuel efficiency. cent of the whole new car market. significant market incentives, the Energy Saving order to determine the potential for these Bolt-on CO2 reduction technologies Trust’s Transport Market Transformation Model savings, achievable through delivering ‘energy Petrol engine development Diesel engine development Interestingly, the diesel engine is more efficient There have been some encouraging recent shows that development of these technologies efficiency’ across the passenger car market. 26 The most significant development in petrol The roots of the diesel engine lie in agricultural than petrol even though the fuel has a lower developments designed to reduce CO2 from in passenger cars will not achieve significant engine technology in relation to CO2 emissions vehicles, ships and trains. It has the same calorific value20. Its efficiency is due to several petrol and diesel in the form of ‘bolt-on’ market penetration until at least 2015. 21 Achieving refinement tends to be easier to achieve in larger (consequently more performance has been the introduction of fundamental basis and set up as the petrol factors. Higher compression required within the technologies. The most notable of these are powerful) diesel engines. 22 Traditional car alternators recharge the car’s battery constantly, regardless of the 22 fuel injection systems. These replaced the engine, but the main difference is that fuel is cylinders (for combustion) means less of the ‘intelligent alternators’ , and stop/start Given the high CO2 emissions associated state of charge of the battery. Intelligent alternators sense the level of charge of the carburettor as the primary method of ignited through heat and very high compression fuel’s energy is wasted as heat loss. Secondly, technology launched in 2007 by manufacturers with traditional fuels, this paints a worrisome battery and switch off recharging when the battery is fully charged, only to re-start managing delivery of fuel into engines during with air as opposed to using sparkplugs. the engine suffers from fewer efficiency losses such as BMW. It has delivered some remarkable picture for the future, as it is apparent that charging when needed. powerful) diesel engines. 23 HMT (2008) The King Review of Low Carbon Cars. Part II: Recommendations for the 1980s in Europe. Fuel injection allows the from pumping because it has no throttle valve. improvements in CO2 emissions, for example the mass-market low-carbon technologies are still action (p26). fuel/air mixture burnt in an engine’s cylinders The diesel engine is significantly more efficient BMW 520d achieves 136 g/km. Other a long way off. 24 Liquefied Petroleum Gas (often referred to also as Autogas) to be controlled more effectively. than a petrol engine of the same power output And the addition of a turbocharger, which is technological improvements coming onto the 25 Combined with fuel cell or internal combustion engine technology 26 Energy Saving Trust (2007) Market Transformation Model http://www. (generally by 15-25 per cent). However, until standard in most modern diesels, improves market with varying costs and efficiency savings Despite the poor short- to medium-term market energysavingtrust.org.uk/download.cfm?p=0&pid=1152 The mixture of air and fuel within an engine’s recently diesels have not been popular in the efficiency because, as for petrol engines, it include variable valve actuation and low uptake forecast, there has been a distinct focus 27 Energy Saving Trust (2007) Market Transformation Model cylinders needs to achieve a delicate balance to passenger car market. Before the late 1990s, allows the engine to be smaller, thus reducing rolling-resistance tyres23. get optimum performance from the fuel they tended to be much noisier, slower and less weight. Furthermore, the lack of a separate burned. Even small deviations from the refined than petrol engines while also being ignition system greatly improves the reliability New low-carbon vehicle technologies optimum mixture result in reduced fuel heavier and more expensive to manufacture. of diesel engines, which has also increased It is important to note that there are two efficiency, poor exhaust emissions and engine their popularity. distinctly different types of low-carbon car: wear. Therefore the introduction of fuel Recent developments, including direct fuel those which are powered by new technologies injection has significantly increased fuel injection, turbocharging and the development It is this boost in diesel vehicle sales over the past (such as hybrids and electric vehicles); and efficiency per unit of power (or brake horse of common-rail technology19, (alongside decade and the consequent decline in petrol-car those which are petrol or diesel powered but power)17. Worryingly, the consequence of this sales that has delivered the largest proportion of are more efficient than the average. This review has been for more powerful cars to be the recent CO2 improvements seen from vehicles is focussed on the latter, as these vehicles have produced, which has negated a significant on a per-vehicle basis (see Figure 5.1, page 12). significantly greater potential for near-term proportion of the potential efficiency This highlights a concern for the future, as there market success due to their comparable improvement (see figure 4.1, page 9) to a similar It is this boost in diesel is a limited extent to which further migration performance and lower costs. degree as the weight gain described above. vehicle sales over the past towards diesel is possible. However, looking briefly at novel, low-CO2 Turbocharging or supercharging has also been decade and consequent technologies shows that their pace of applied to many petrol engines, which in both development has increased since the late cases involves forcing extra air into the decline in petrol sales 1990s. Different manufacturers have dabbled

18 cylinders , allowing more fuel to be burnt that has delivered the 17 Known as Specific fuel consumption in the development and demonstration of a during each revolution of an engine. This 18 Turbochargers are driven by the engine’s exhaust gases, whereas supercharging number of technologies with mixed levels of process can increase fuel efficiency, mainly by largest proportion of the usually involves a pump driven by the engine to force more air into the engine. success. These technologies include LPG24, 19 Common Rail Diesel Systems allow diesel to be supplied to the engine under 25 increasing the power output of an engine CO2 reductions very high pressure, which allows for better combustion. The technology also allows electric vehicles, hydrogen , hybrid electric, without increasing its size, and therefore for improved control of fuel injection. Bosch Automotive Handbook 7th Edition. bio-fuels and natural gas. 20 Diesel calorific value≈ 38 MJ/kg, Gasoline ≈ 44 MJ/kg

10 DRIVEN DRIVEN 11 5. Passenger Car Market Trends of the Last Decade

persists within the market (producing CO2) for What this also indicates is that the new car market The chart shows that the lower medium, another 13 years (average) or so, before it reaches could reduce emissions by up to 25 per cent if supermini, upper medium and sports utility vehicle the end of its useful life. consumers started to seek out the lowest CO2 (SUV) segments are currently the four largest PASSENGER CAR MARKET 5 emission vehicles in class (best in class). contributing segments to the overall CO2 In 2007, the lowest CO2 emitting vehicle on the This can be achieved by influencing purchase emissions of the new car market. market was 99 g/km CO231, and the highest was decisions to reflect the ‘low carbon choices’ in more than five times this at 545 g/km CO232. figure 5.2. This is explored in further detail for Figure 5.4 looks at the change in CO2 emissions TRENDS OF THE However, the graph shows that most 2007 sales each market segment. of each segment from 1998 to 2007. It shows have been for vehicles emitting between 120 and that the upper medium (large family cars) and 220 g/km. Figure 5.3 shows the overall contribution to CO2 executive vehicle segments have reduced LAST DECADE emissions of the market, split by market segment. emissions significantly, but this has been offset It also shows that improvements in CO2 emissions This type of analysis has not been shown before by large increases in the supermini, SUV and per vehicle have been made, as the distribution of with such a degree of accuracy as it is not correct people carrier (MPV) segments37. ithin this section, we explore the CO2 footprint of vehicles resulting from the ‘in use’ sales has moved to the left over time. However, to assume that the annual mileage driven is the development of the new-car phase of a vehicle’s lifecycle – i.e. the emissions comparing the shape of the sales distribution same across all segments. In order to account for The development of each market segment W market over the last decade and its generated whilst the vehicle is being driven. shows that although it has moved to the left this, we have combined UK stocks and sales data from 1998 to 2007 is reviewed in the following impact on CO2 emissions. This includes an The main reason is that this part of a vehicle’s (lower carbon) end of the scale, the shape of the with DfT National Transport Survey data, which sections. These are included largely as a overview of the development of the whole life cycle generally accounts for around 85 per distribution in 2007 is very similar to what it was a records the annual mileage of UK drivers by reference guide for those interested in market and its emissions. However, examining cent of the total footprint29 30. decade ago. different classes of vehicles35. particular parts of the new car market. the market in its entirety only shows part of the picture, as the nature of the car market is highly Furthermore, we also only consider the market for This means that although manufacturers are heterogeneous, made up of a number of different new cars here. It is important to note that there producing more efficient vehicles than 10 years Figure 5.2: New Car Sales Weighted CO2 g/km Distribution33 ’segments’ of vehicles each aimed at a different is a much larger body of used vehicles than ago, consumers are not choosing to purchase any audience of buyers. new sales, which are making the largest overall more lower CO2 (or ‘best in class’) vehicles than contribution to CO2 emissions from cars. they did in 1998 compared to what is available on 900 Although new car The last decade has brought with it some However, as new vehicle sales regenerate the the market. CO2 emissions have 2007 significant changes within the market, which only market (and used vehicles will eventually exit 800 improved across the become explicit when individual market segments the market through scrapping), we focus on This is surprising, given that there has been market, relatively, Low carbon are explored in detail. Therefore we look at each the new car market as influences here are key considerable activity in recent years to incentivise 700 buyers are not choices

s) purchasing any more major vehicle segment and review its evolution to reducing emissions. the take-up of lower CO2 vehicles, and there are 1998 over the last ten years, which helps to develop a now very good financial reasons to choose a low 600 low CO2 vehicles than they were a more informed picture of the market. 5.1 Market overview CO2 car over a high CO2 car (see Section 7, CO2 500 decade ago Figure 5.2 shows the range of CO2 emissions of legislative and policy developments, page 26). Fleet cars vs. private cars new cars in the UK, distributed by sales from 1998 ehicles (000’ 400 Aside from analysing the market by vehicle to 2007. The importance of this becomes clear 31 VW Polo Bluemotion/SEAT Ibiza Ecomotive V 32 Maserati MC12 segment, the other main aspect to consider is that when considering that the range of CO2 emissions 33 Note – the distributions shown are grouped into 20 g/km CO2 bands in order to of . 300 the new car market is made up of two distinct shown represents the real CO2 ‘choice’ presented help visually represent the market. As a result, the extremes of the market may not No components, private car sales (44 per cent) and fleet to the consumer when considering which new car be 100% accurate (e.g. the 2007 distribution sold 544 vehicles between 80-99 g/ 200 or company car sales (56 per cent 28). Market drivers to purchase. The car subsequently bought then km CO2, however all of these vehicles were 99 g/km vehicles). 34 EST Analysis of SMMT Sales Data and DfT National Transport Survey Mileage Data and CO2 emissions policies which affect these two 35 Note of caution – the vehicle categorization used by the DfT and the SMMT differ 100 parts of the market are different and therefore these 28 SMMT (2007) slightly. DfT categories include – Small Car (applied to Mini and Super Mini categories), are distinguished from each other where relevant. 29 SMMT (2007). The UK Automotive Sector Sustainability Report: Production, Small/Medium Car (applied to Lower Medium category), Medium Car (applied to Upper 0 Consumption and Disposal Eighth Industry Report. Medium and Executive categories), Large Car (applied to Luxury Saloon and MPV <7 80-99 100-119 120-139 140-159 160-179 180-199 200-219 220-239 240-259 260-279 280-299 300-319 Figure 5.1 shows the change in the sales- 30 Note that the production of some very low-carbon technology vehicles like categories), Land Rover, Jeep or similar (applied to SUVs). Sports cars do not have a 9 weighted average CO2 of new cars from the hybrids may diverge from the above generalisation, which will become more close equivalent category in NTS, so the overall average vehicle mileage is applied. private sector and fleet sales from 1997-2007. important to consider should they become much more prevalent within the market 36 EST Analysis of SMMT Sales Data and DfT National Transport Survey Data in future. However, as this review focuses on existing technologies this is not 37 Note, an average mileage has been applied over time, so variations in emissions CO2 g/km It is important to note that we only consider the considered here. by segment are determined by changes in sales only.

34 36 Figure 5.1: UK Sales Weighted Average New Car CO2 Emissions Figure 5.3: 2007 Annual Passenger Car CO2 Emissions by Segment Figure 5.4 Annual New Car CO2 Emissions 1998, 2002 and 2007 by Vehicle Category 195 New-car Largest decrease Largest increase 190 emissions ● Small Family 27% have fallen 2.0 185 ● Super Mini 22% ● 1998

over a ) ● Family 19% 2 ● 2002 180 decade ● 2007 ● SUVs 12% 1.5 Emissions (g/km) 2 ● MPV 8% 175 ● Executive 6% UK (Private) 170 ● Specialist Sports 4% 1.0 Emissions (MtCO UK (All) ● ● Luxury Saloon 1% 2 165 UK (Fleet) 0.5 160 verage New Car CO Annual CO A

155 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Family Executive Luxury Small Specialist Super Mini SUVs Multi Saloon Family Sports Purpose Year Vehicle Category

12 DRIVEN DRIVEN 13 5.2 Superminis Superminis 5.2

Vehicle choice and CO2 segment. This trend highlights a very significant In 2007, the choice available to consumers in potential for saving CO2 through changing The increasing terms of CO2 emissions in absolute terms was consumer behaviour in this segment. large, ranging from the lowest at 99 g/km (VW popularity of this Polo Bluemotion) to more than twice that for the Applying average annual mileage data to this highest at 221 g/km (Mini Cooper S [Auto]). segment40 shows that the total annual segment is helping to However, 90 per cent of sales are for vehicles contribution to CO2 emissions from superminis deliver a significant SUPER between 109 and 168 g/km CO239. 10 years ago, has increased from 17 per cent to 23 per cent this range was 139 to 179 g/km CO2. over the last decade, as a result of increased sales. proportion of the CO2 reductions across MINIS This shows a significant increase in vehicle choice In summary, it is encouraging that the supermini and the main area of increase has been at the segment has become more popular over the past the market lower end of the scale. However, although the decade, as the CO2 emissions of the vehicles are Sales trends being made, this segment is showing below- many parts of the market, but is particularly choice of low-CO2 vehicles and CO2 performance on average 15 per cent lower than the market This is the most popular segment in terms of average improvement in this area. pronounced in the supermini market, which has improved, consumers are not choosing to average. However, the rate of CO2 reduction in

car sales, accounting for a third of all market has allowed the cars to appeal to a much buy the lower-CO2 models. Figure 5.5 shows that this segment is worryingly slow, and consumers 39 For 2006 sales, the 5th percentile of the distribution occurs at 109 g/km and the sales in 2007. Furthermore, the segment has A key factor in determining this trend is that larger audience than before and has therefore buyers are now showing a bias towards tend to seek out the higher CO2 vehicles in the 95th at 175 g/km. enjoyed increasing popularity over the last increases in diesel car sales, a major driver in helped increase sales. purchasing the higher CO2 vehicles in the segment more readily than the lowest. 40 DfT National Transport Survey decade, with sales increasing by 34 per cent CO2 reductions across other segments, have between 1998 and 2007. This has come at the not occurred to any significant degree here, Manufacturers often allow popular models of expense of other high-volume classes such as rising from 6 per cent to just 13 per cent of cars to ‘grow’ over time when new models the upper and lower medium segments, which total sales over the past decade38. come out, so that they remain attractive to have lost market share. the same buyer when they come to replace Another major reason for their increasing their car after a few years, but have moved on This segment is largely dominated by private popularity is that superminis have grown in size to another ‘life stage’. For example, a 2008 purchases, which account for 60 per cent of (volume) a lot over the past 10-20 years (see VW Polo is a very similar size to a 1990 Mark 1 sales, and this has changed little since 1998, section 4, page 8). This has happened across VW Golf. showing that the increase in popularity of small

vehicles has occurred across both the fleet and Figure 5.5: Mini/Supermini CO2 sales weighted distribution 1998 and 2007 private market. It is worth noting that a significant portion of fleet sales in the segment 450 Surprisingly, are for daily rental cars (e.g. Avis/Hertz) which 2007 are also not subject to the same taxes as 400 supermini buyers normal fleet vehicles. 350 tend to buy the 1998 higher CO2 CO2 emissions 300

Sales-weighted average CO2 emissions of s) models available superminis are 15 per cent lower than the 250 market average, which is a function of the 200 small size and weight of the vehicles. The Sales (000’ massive popularity of this segment is helping to 150 deliver a significant proportion of the CO2 reductions across the market. However despite 100 this, within the supermini segment itself there 50 are some areas of concern on CO2 emissions. 0 <100 100-11 120-13 140-15 160-17 180-19 200-21 220-23 240-25 260-27 280-29 Since 1998, the sales-weighted average CO2 9 9 9 9 9 9 9 9 9 9 performance of superminis has improved from 160 to 141g/km, a reduction of 12 per cent. CO2 g/km This shows that although some progress is Table 5.1: Supermini sales and CO2 emissions 1998-2007 Year 1998 2002 2007 Vehicle Sales (000's Vehicles)* 591 871 792

Sales weighted average (CO2 g/km)* 160 148 141.39

Difference to market average g/km CO2 (per cent) 84 per cent 85 per cent 86 per cent 38 Note the lack of dieselisation may have affected CO2 emissions of the segment, but as many Superminis are driven in urban environments, there are positive air Annual CO2 emissions (MtCO2)** 1.2 1.7 1.4 quality benefits as a result of this as diesels emit pollutants such as particulate Percentage of total CO2 emissions (per cent)** 17 per cent 23 per cent 22 per cent matter which contribute to poor air quality. * = SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data 14 DRIVEN DRIVEN 15 5.3 Small Family (Lower Medium) Family (Upper Medium) 5.4

SMALL Family Family cars CARS

lthough these are small family CO2 models. What is interesting is that the Sales trends Vehicle choice and CO2 and this is likely to be largely driven by the cars, this segment is dominated 1998 distribution shows more customers Since 1998, fleet sales The family car or upper medium segment is very As with other segments, the range of CO2 company car tax regime. However, the graph also by the fleet market, accounting buying lower carbon vehicles – so although the popular, the third largest in terms of sales and emissions for the segment is very large, 104 g/km confirms that there is limited opportunity to for almost two thirds of sales average emissions of the segment have have increased, accounting for approximately one sixth of all (Toyota Prius) to 334 g/km (Audi RS4 Quattro), further reduce CO2 emissions through changing A 2 within the segment. Since 1998, fleet sales improved over the past decade, customers are sales. It is also dominated by the fleet market, although 90 per cent of sales are between 138 consumer behaviour. So future CO reductions in have increased, but interestingly private no longer seeking out the lower CO2 models! but interestingly which makes up over 73 per cent of sales. and 219 g/km. this segment are going to be small and difficult sector sales have decreased by a quarter There is much potential in this segment for private sector sales Sales of family cars have also decreased to achieve unless manufacturers begin to over the same time period. improvement from encouraging the fleet significantly over the last 10 years. Figure 5.7 shows the distribution of CO2 produce more efficient vehicles. and private market to seek out the lowest have decreased by a emissions of vehicles sold in 1998 and 2007. Sales trends emitting models. CO2 emissions The graph highlights the improvement made The segment itself has shown a 12 per cent quarter over the same Today, this segment’s sales-weighted average CO2 since 1998, and also shows that more consumers improvement in average CO2 emissions. Vehicle choice and CO2 time period emissions are slightly above the market average are now seeking out more efficient models in the This is a similar, ‘average’ level of improvement The lowest emitting lower medium car in 2007 at 169 g/km. This reflects the fairly large and segment. As noted previously, this is likely to be compared to superminis and the rest of the was the hybrid Honda Civic IMA at 109 g/km heavy nature of the vehicles. due to the dominance of fleet sales, and the market, which is slightly worrying, given that CO241 and the highest is the VW Golf R32 at impact of company car taxation. this segment represents such a large proportion 259 g/km CO2, so there is a very wide range to There has been a 14 per cent improvement in of the whole market. choose from in terms of CO2 emissions. sales-weighted average CO2 emissions from 1998 The graph shows that consumers are purchasing to 2007, which is average compared to other the lower CO2 vehicles within the segment, CO2 emissions segments. This is very much as a result of the Improvements in CO2 performance have largely Figure 5.6: Lower medium CO2 sales-weighted distribution 1998 and 2007 large proportion of fleet sales, which have been Figure 5.7: Family cars CO2 sales-weighted distribution 1998 and 2007 been driven by increases in diesel sales, which 450 driven towards diesel mainly through company have more than doubled over the period from 1998 Small family cars car tax incentives. Remarkably, in 1998 80 per 250 Family car buyers are 1998, whilst petrol sales have declined by one 400 have showed an cent of fleet sales were petrol vehicles; in 2007, purchasing relatively third. The proportion of diesel sales is largely the exact opposite is true, with 73 per cent diesel. 1998 driven by the fleet market, which is largely as a 350 average improvement 200 more low CO2 models result of company car tax. What is interesting to note about the segment 300 in CO2 compared to 2007 than in 1998, largely

s) 2007 is that individual improvements in diesel and the rest of the market s) driven by the company Interestingly, the distribution of sales in terms 250 petrol cars have only reduced their CO2 150 of CO2 in 2007 (Figure 5.6) is almost emissions by 5 per cent. This is much less than car market symmetrical. This means that consumers are 200 the improvements in other segments and

Sales (000’ 100 buying as many lower CO2 models as higher illustrates that CO2 performance here is only Sales (000’ 150 driven by the much greater number of diesels 100 that consumers purchase. 50 50 It is also apparent that there is little further opportunity for reductions in CO2 emissions 0 0 <100 100-119 120-13 140-15 160-17 180-19 200-21 220-239 240-25 260-27 <100 100- 120- 140- 160- 180- 200- 220- 240- 260- 280- 300- 320- through further increases in diesel sales, so 280-29 300-31 320-33 340-359 360-37 119 139 159 179 199 219 239 259 279 299 319 339 9 9 9 9 9 9 9 9 9 9 9 improvements in the engines themselves are CO2 g/km needed to improve the segment further using CO2 g/km technology. Lack of progress to date suggests Table 5.2: Lower medium sales and CO2 emissions 1998-2007 that there is potential to do this, because it has Table 5.3: Upper medium car sales and CO2 emissions 1998-2007 Year 1998 2002 2007 been achieved in other segments. New models Year 1998 2002 2007 Vehicle Sales (000's Vehicles)* 751 771 721 such as the Ford Mondeo ECOnetic and VW Vehicle Sales (000's Vehicles)* 550 505 386 Passat Bluemotion will help this in 2008. Sales weighted average (CO2 g/km)* 181 168 159 Sales weighted average (CO2 g/km)* 197 184 169

Difference to market average g/km CO2 (per cent) 96 per cent 97 per cent 96 per cent Difference to market average g/km CO2 (per cent) 104 per cent 106 per cent 103 per cent

Annual CO2 emissions (MtCO2)** 2.1 2.0 1.8 Annual CO2 emissions (MtCO2)** 2.0 1.7 1.2

Percentage of total CO2 emissions (per cent)** 29 per cent 24 per cent 19 per cent 41 The similar Toyota Prius (104 g/km CO2) is classed as an ‘Upper Medium’ vehicle Percentage of total CO2 emissions (per cent)** 31 per cent 28 per cent 28 per cent * = SMMT Data * = SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data 16 DRIVEN DRIVEN 17 5.5 Executive Cars Sports Cars 5.6

EXECUTIVE Cars SPORTs CArs

Sales trends Sales trends Executive vehicles take up 4 per cent of the The sports car segment includes a very wide total market and their sales comprise 62 per range of vehicles, from small roadsters to cent fleet and 38 per cent private sales. supercars. In essence, the segment is an Over the past decade, the segment has shrunk amalgamation of smaller niche segments by 16 per cent as buyers have diversified into (coupes, grand tourers, roadsters, supercars other segments such as SUVs. etc.), which have been brought together in order to provide a simpler classification. CO2 emissions CO2 emissions are nearly 20 per cent more The segment is relatively low-volume, than the market average, which means that representing less than 3 per cent of sales of the although executive cars account for only 4 per total market and sales consisted of 60 per cent cent of sales, they are responsible for 6 per private purchases and 40 per cent fleet sales in cent of total CO2 emissions. 2007. Overall, the size of the segment in terms of sales has stayed relatively constant over the The level of ‘dieselisation’ within this segment last decade. has been very high, with the market share of petrol vehicles falling from 87 per cent to just CO2 emissions 25 per cent over the last decade. This has been Most sports cars are high performance vehicles driven by company car tax, which encourages and as a result, the segment has the third- diesel sales in fleets. highest CO2 emissions, only exceeded by SUVs and luxury saloons. This huge increase in diesel sales has resulted in executive cars showing the second largest What sets this segment apart from all others is reduction in sales-weighted average CO2 Figure 5.8: Executive vehicle CO2 sales-weighted distribution 1998 and 2007 that average CO2 emissions have increased Figure 5.9: Sports car CO2 sales-weighted distribution 1998 and 2007 42 emissions of all the segments in the market 60 significantly over the last decade, whereas all – with a 19 per cent reduction over the other segments have shown decreases. So in 25 1998 Despite having CO2 emissions per past decade. terms of emissions (g/km) per vehicle, this 2 50 high average CO segment is the worst-performing by a 2007 vehicle have actually Vehicle choice and CO2 emissions, executive significant margin. 20 increased since 1998 The absolute choice of vehicles ranges from 40 cars have delivered a making this the worst

136 (BMW 520 2.0 Diesel) to 369 g/km CO2 s) The sports car segment has traditionally been

2007 s) (Mercedes CLK63 AMG Black Series), however 16 per cent reduction largely driven by vehicle performance and as a 15 performing segment by 90 per cent of sales are for vehicles between 30 in the last decade result, its development has focused on the a significant margin 1998 158 and 234 g/km CO2. production of higher-performance vehicles.

Sales (000’ 10 20 This is the main driver behind the increase in Sales (000’ As shown in Figure 5.8, the distribution of sales CO2 emissions here. in terms of CO2 emissions shows that an equal amount of consumers purchase high and low 10 Vehicle choice and CO2 5 CO2 vehicles. As this segment includes a wide range of 0 vehicles, the range of CO2 emissions of the 100-11 120-13 140-159 160-17 180-19 200-21 220-239 240-259 260-27 280-29 300-319 320-339 340-35 380-39 360-37 vehicles is also very wide, ranging from 124 g/km 0 120-139 140-159 160-179 180-199 200-219 220-239 240-259 260-279 280-299 300-319 320-339 340-359 360-379 380-399 400-419 420-439 440-459 460-479 480-499 9 9 9 9 9 9 9 9 9 9 (Vauxhall Tigra CDTI 16V) to 545 g/km CO2 g/km (Maserati MC12), however 90 per cent of sales CO2 g/km occur between 146 and 358 g/km CO2. Table 5.4: Executive car sales and CO2 emissions 1998-2007 Table 5.5: Sports car sales and CO2 emissions 1998-2007 Year 1998 2002 2007 The distribution of sales in terms of CO2 Year 1998 2002 2007 Vehicle Sales (000's Vehicles)* 124 114 104 emissions is irregular, as Figure 5.9 shows. Vehicle Sales (000's Vehicles)* 68 60 66 This is a function of the ‘sports cars‘ comprising Sales weighted average (CO2 g/km)* 239 220 193 Sales weighted average (CO2 g/km)* 215 219 224 multiple, niche vehicle segments. Difference to market average g/km CO2 (per cent) 126 per cent 127 per cent 117 per cent Difference to market average g/km CO2 (per cent) 113 per cent 126 per cent 136 per cent

Annual CO2 emissions (MtCO2)** 0.5 0.5 0.4 Annual CO2 emissions (MtCO2)** 0.2 0.2 0.2

Percentage of total CO2 emissions (per cent)** 8 per cent 6 per cent 6 per cent Percentage of total CO2 emissions (per cent)** 4 per cent 3 per cent 4 per cent 42 The segment with the largest improvement in SWA CO2 is the MPV segment * = SMMT Data * = SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data 18 DRIVEN DRIVEN 19 5.7 SUVs Luxury Saloons 5.8

SUVs Luxury saloons

Sales trends Sales trends SUV sales have increased by 79 per cent in a Sales of luxury saloon vehicles are low compared decade, the second largest increase in the whole to the rest of the market, as shown by Table 5.7. market. This rise plus the high CO2 emissions Fleet sales account for just over half (55 per cent) per vehicle have given this segment a bad press of total sales. over the past few years. The private market accounts for 58 per cent of sales, a figure which CO2 emissions has not varied significantly over the past decade. Average CO2 emissions here are the highest of any segment. However, as sales are very low compared CO2 emissions Vehicle choice and CO2 Absolute choice in terms of CO2 in 2007 to other segments, the overall CO2 emissions Due to the size and weight of these vehicles, What is apparent from Figure 5.10 is that not emissions ranged from 171 g/km (Suzuki Jimny contribution of luxury saloons is also low, at 1 per CO2 emissions per vehicle are very high only have sales of SUVs increased significantly 1.3 JLX Diesel) to 392 g/km (Mercedes M-Class cent of the total market. compared to the average (40 per cent above the since 1998, but the segment has also split into ML63 AMG 4MATIC), however 90 per cent of market average). However, contrary to popular two; large, seven-seat SUVs (e.g. Land Rover sales occur between 173 g/km CO2 and 299 g/ Emissions have decreased by 7 per cent press, this is not the worst-performing segment Discovery) and smaller five-seat SUVs (e.g. km CO2. (average per vehicle) which is the second worst on CO243. Honda CRV). This is evident from the two peaks performance behind sports cars. This is likely of the CO2 distribution shown in 2007. This The distribution is not significantly positively to be because the high cost of these vehicles Taking into account mileage and sales, the total trend has been recognised by a number of trade skewed, with the two peaks relatively means that purchasers can afford high running contribution to annual CO2 of SUVs has publications in recent years, and should be symmetrically distributed. This indicates that costs, so fuel efficiency is less of a priority increased more than 50 per cent, a worrying noted for stocks and sales data in future. within both sub-segments, consumers are not compared to other segments. trend. This means the segment has now become actively seeking out the lower CO2 models. the 4th largest contributor to CO2 in the market In 1998 there were no diesel luxury saloons sold (see Figure 5.3, page 14). in the UK at all but now, diesel vehicles account for Figure 5.10: SUV CO2 sales-weighted distribution 1998 and 2007 half of all sales. Diesel sales have driven the Figure 5.11: Luxury saloon CO2 sales-weighted distribution 1998 and 2007 2 This is largely due to the increase in sales, but 45 segment’s reductions in CO and their sales- interestingly, the National Travel Survey also 2007 weighted average CO2 emissions of 223 g/km are 10 SUVs have earned a 1998 Luxury Saloons have shows that annual mileages of SUVs are 10 per 40 significantly less than the 317 g/km of petrol poor reputation due to 9 the highest CO2 cent higher than the average. equivalents. The average CO2 emissions of petrol 35 their high emissions luxury saloons per vehicle have in fact increased by 8 emissions per vehicle More positively, the segment has improved 11 per cent since 1998. 30 and increasing sales. 7 of the whole market,

relatively well in terms of average CO2 s) 1998 However they are not s) 6 and have shown emissions, achieving the third best improvement 25 Vehicle choice and CO2 (equal with the upper medium segment) behind the worst performing In 2007 absolute choice in terms of CO2 emissions 5 little improvement 20 MPVs and executive vehicles. cars on the market for this segment ranges from 199 g/km (Audi A8 2007 since 1998

Sales (000’ 4 FSI SE Diesel 2.8) to 495 g/km CO2 (Bentley Sales (000’ 15 Arnage RL6.8), which shows that even though this 3 10 is a small segment in terms of sales volume, the 2 range of choice is still very significant. 90 per cent 5 of sales occur between 214 g/km and 410 g/km 1 CO2, showing that unlike other segments, the 0 0 140-15 160-17 180-19 200-219 220-23 240-25 260-27 280-299 300-31 320-33 340-35 360-37 380-39 400-41 420-43 440-45 extremes of the distribution are not very large. 180-19 200-219 220-23 240-25 260-279 280-29 300-31 320-33 340-35 360-379 380-399 400-41 420-43 440-459 460-47 480-49 500-51 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 CO2 g/km Interestingly the distribution of CO2 emissions vs. CO2 g/km sales shows that the segment is skewed towards Table 5.6: SUV sales and CO2 emissions 1998-2007 Table 5.7: Luxury saloon sales and CO2 emissions 1998-2007 the lower CO2 vehicles in the segment. This could Year 1998 2002 2007 be due to the concentration of diesel sales towards Year 1998 2002 2007 Vehicle Sales (000's Vehicles)* 99 138 176 the lower end of the range (which accounted for Vehicle Sales (000's Vehicles)* 17 10 13 50 per cent of sales in 2007). Sales weighted average (CO2 g/km)* 268 247 228 Sales weighted average (CO2 g/km)* 295 283 274

Difference to market average g/km CO2 (per cent) 142 per cent 142 per cent 138 per cent Difference to market average g/km CO2 (per cent) 156 per cent 163 per cent 166 per cent

Annual CO2 emissions (MtCO2)** 0.5 0.6 0.7 Annual CO2 emissions (MtCO2)** 0.11 0.07 0.08 43 Luxury saloons have the highest CO2 emissions per vehicle. Sports cars and Percentage of total CO2 emissions (per cent)** 7 per cent 9 per cent 12 per cent Percentage of total CO2 emissions (per cent)** 1.6 per cent 0.9 per cent 1.3 per cent executive vehicles also have very high CO2 emissions per vehicle. * = SMMT Data * = SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data 20 DRIVEN DRIVEN 21 5.9 Multi Purpose Vehicles Multi Purpose Vehicles 5.9

The MPV segment is the best MPVs Multi purpose vehicles improver in terms of CO2 emissions per vehicle, with a 22 per cent Sales trends • One of the main drivers of increased sales the more efficient vehicle segments in terms of In the past decade, this segment has grown has been the development in recent years of CO2 emissions per passenger kilometre. improvement from a small niche into a massive mainstream small, 5-seater MPVs such as the Citroen segment, accounting for 8 per cent of the total Xsara Picasso and the Ford Focus C-Max. Vehicle choice and CO2 since 1998 market. This is due to huge increases in sales The additional space offered by these The choice available to consumers in terms since 1998, making it the fastest growing vehicles has attracted many buyers away of CO2 emissions is very large, ranging from car-market segment, with sales increasing more from other traditional segments (e.g. lower 127 g/km (Ford focus C-Max 1.6 Diesel) to than three times from 1998 to 2007. Contrary to medium). This development has also reduced 396 g/km CO2 (Cadillac SRX V8). However expectations, MPVs are dominated by fleet sales, the average size and weight of vehicles in 90 per cent of sales are between 157 and which make up over 72 per cent of the market. the segment and therefore the emissions per 230 g/km CO244. Figure 5.12 shows the 2007 This has not varied significantly since 1998. vehicle. However, as this trend this may have distribution of CO2 emissions is very attracted buyers away from other lower-CO2 significantly skewed towards lower-CO2 CO2 emissions car segments (such as lower medium) this vehicles within the segment. This is consistent Table 5.8 shows that the average CO2 therefore could have pushed CO2 emissions with utility and efficiency being significant emissions of this segment have improved from up overall. vehicle purchase drivers here and increasing 23 per cent above the market average in 1998 sales of 5-seaters expanding the sector. to just 9 per cent above average in 2007. This There is little data availability on occupancy makes the MPV segment not only the fastest rates for different segments of vehicles, but it is growing, but also the best improver in terms of likely that people- carriers have higher average

CO2 emissions per vehicle, with a 23 per cent occupancy rates than other types of vehicle. improvement since 1998. This indicates that MPVs are likely to be one of 44 In 1998, this range was 176 to 302 g/km CO2

Considering the size of these vehicles, with many having the ability to transport up to Figure 5.12: MPV sales-weighted distribution 1998 and 2007 seven adults, the potential CO2 emissions per 80 passenger are relatively low (although there is 2007 MPV average CO2 little data available to establish real occupancy 70 rates of MPVs vs. other vehicles). The emissions have improvement in CO2 emissions of MPVs since 60 reduced mainly 1998 indicates that there is more potential due to increased

amongst the other segments to improve their s) 50 CO2 emissions over and above what has been sales of smaller achieved to date. There are a number of factors 40 5-seater models which have helped to achieve this improvement in emissions: Sales (000’ 30 • MPVs are primarily utilitarian vehicles, mainly used to provide efficient and safe transport 20 1998 for companies and families. This means that manufacturers have placed more emphasis 10 on efficiency, with power arguably playing a 0 secondary role, unlike in other segments. 100-11 120-139 140-159 160-17 180-19 200-21 220-23 240-25 260-27 280-299 300-31 320-33 340-35 380-39 360-37 400-41 9 9 9 9 9 9 9 9 9 9 9 9 9

CO2 g/km MPVs are the fastest Table 5.8: MPV sales and CO2 emissions 1998-2007 Year 1998 2002 2007 growing segment with Vehicle Sales (000's Vehicles)* 48 93 145 sales increasing more than Sales weighted average (CO2 g/km)* 234 200 180 two and a half times from Difference to market average g/km CO2 (per cent) 123 per cent 115 per cent 109 per cent 1998 to 2007 Annual CO2 emissions (MtCO2)** 0.3 0.4 0.6 Percentage of total CO2 emissions (per cent)** 4 per cent 6 per cent 9 per cent * = SMMT Data ** = DfT National Travel Survey Data applied to SMMT Data 22 DRIVEN DRIVEN 23 6. Smarter Driving

Whilst smarter driving has only recently begun Smarter driving measures to gain wider recognition in the UK, many The first four points listed below are the key European countries have run national smarter smarter driving measures. These are the driving campaigns for many years. For example techniques that really make a big difference to the “Spritspar” campaign in Austria49, the fuel consumption and therefore CO2 emissions. 6 50 “Neues Fahren” campaign in Germany , and The other points are all significant, but should the previously mentioned “Het Nieuwe Rijden” be considered secondary. campaign in the Netherlands. When accelerating, change up to Air conditioning (a/c) systems use Finally, the proposed European Commission a higher gear between 2000 and 6 mechanical power from vehicle CO2 Emissions target (see Section 7, page 26) 1 2500 rpm. Changing up at these engines to drive their compressors. of 130 g/km includes an additional 10 g/km of relatively low revs saves fuel because an engine’s These compressors require a lot of power and reductions to be achieved by ‘complementary internal friction increases with engine speed. The significantly increase fuel consumption. measures’, which refers mainly to encouraging more subtle point about the use of gears is that Research by ADEME55 in France found that for Whilst delivering CO2 reductions through more efficient driving through the application with a modern engine, it’s more efficient to typical use over a 12 month period a car with improving consumer choice of vehicles is likely of bolt-on technologies such as gear shift change gear at the recommended low revs, even a/c would on average consume around 5 per indicators and tyre pressure gauges. if to achieve a reasonable level of acceleration cent more fuel than the same car without a/c. to be the most significant way of reducing you have to compensate by putting your foot However at high speeds – typically over 45 or CO2 emissions from the market, it is not the Activities in the UK down harder on the accelerator. 50 mph – opening a window is likely to cause only action available to consumers. The Department for Transport’s ‘Act on CO2’51 fuel consumption to rise due to increased air campaign began in March 2007 by promoting Slow Down. Above approximately resistance. The advice therefore is to use a/c smarter driving messages through a mass 40-45 mph, fuel consumption increases sparingly as long as this doesn’t require media advertising campaign including TV, 2 with speed because air resistance and opening a window at high speed. billboards, and national press. The campaign engine friction increase with speed. The effects messages are consistent with those of the can be dramatic. For example, data from the Carrying excess weight in a vehicle European campaigns mentioned above, AA Motoring Trust show that cars at 85mph 7 increases fuel consumption so heavy because the DfT references TREATISE for much consume approximately 25 per cent more fuel items e.g. large tool kits, golf clubs etc, of its factual statements. than at 70mph. should be removed when not required.

Funded by the Scottish Government, the Anticipate the road and traffic Turn off. Re-starting a modern Energy Saving Trust ran an eco-driving pilot in further ahead to avoid unnecessary engine incurs virtually no penalty Glasgow and Edinburgh in 2006/07 and this 3 acceleration and braking. In urban 8 in terms of fuel consumption. activity is planned to be scaled up in 2008/09. driving this can make an enormous difference So whenever you turn an engine off – even for since driving at low constant speeds requires very just a few seconds – you’ll be saving fuel. Transport for London launched a smarter little fuel or power – almost all the fuel consumed The recommendation is to turn your engine off driving campaign52 in London in February in urban driving is used to accelerate. if you think you’re going to be stationary for 2008. The campaign is planned to last for two more than a minute or so. It is worth noting years and will include advertising on buses, Step off the accelerator early. that for older vehicles with carburettors, which ne issue with action on messages. There is also strong anecdotal Activities in Europe billboards, local radio and local printed media. When decelerating or driving downhill were common until the late 80s, re-starting the vehicle purchase is that evidence that smarter driving leads to significant The EC-funded TREATISE47 project, which was The messaging is again consistent with the 4 with a trailing throttle (i.e. foot off the engine would use extra fuel as some unburned consumers tend to replace non-fuel financial savings through reduced wear led by the Energy Saving Trust, ran from European projects and the Act on CO2 campaign. accelerator), a modern vehicle recognises that it fuel would pass straight through the engine. their cars only every three and tear on various vehicle components including January 2005 to June 2007 and involved eight does not need to power the wheels and so it A legacy of this is that many older drivers are to five years. This means brakes, tyres, clutch and gearbox. countries. The project ran a total of 63 training Focus ECOnetic Smart Driving Challenge reduces the fuel flow to the engine to virtually resistant to the idea that turning the engine off the opportunity for taking workshops at which more than 1700 transport Ford and the Energy Saving Trust will be zero. This uses less fuel than coasting in neutral. for a short time saves fuel. Oaction on the vehicle you drive only comes Potential CO2 savings advisers were trained in: smarter driving; running a national smarter driving competition The advice, therefore, is always to remain in gear along once in a while. The other major It is difficult to generalise about the extent of cleaner fuels and vehicles; and mobility from May to Autumn 2008. This will involve but to step off the accelerator as early as possible, Under inflated tyres increase fuel mechanism for reducing CO2 emissions from the fuel and CO2 savings that smarter driving management. The project has also produced regional heats at six locations across the UK for example when approaching a red light or a consumption. Tyres under-inflated by road transport is through driver behaviour can achieve, since this depends very much reference manuals and electronic training tools. and a final at Silverstone, at which a significant roundabout. 9 25 per cent will typically increase fuel and the adoption of a ‘smarter’ driving style. on how a driver drove in the first place. prize will be at stake. Ford intend to use these consumption by around 2 per cent56. Furthermore, evaluation of smarter driving Ecodriven48 is a European Commission funded events to promote the low-carbon variant of Remove roof racks, bike racks etc. The term ‘smarter driving’, also known as campaigns will show very different results project to promote smarter driving in nine the Ford Focus and to achieve significant Vehicle manufacturers go to great Try to avoid using your car for ‘ecodriving’, simply means driving in a depending on whether the campaigns involved European countries, including the UK, where national press coverage of smarter driving. 5 lengths to make their vehicles short journeys where other more fuel-efficient manner. This reduces fuel one-to-one driving lessons, targeted information the Energy Saving Trust is the project partner. aerodynamic, even focusing on the 10 sustainable means of transport could consumption and CO2 emissions: for a given or simply awareness-raising through mass Ecodriven began in January 2006 and will The MPG Marathon53 is an event that first took aerodynamic design of items such as door be used (e.g. cycling) and cold engines burn fuel, the two are directly proportional, so a media. However after receiving one-to-one continue until December 2008. Partners have place in 2000 and which will be running again handles and badges! It is therefore no surprise more fuel and produce more emissions. reduction of X per cent in fuel consumption smarter driving lessons around circuits designed initiated hundreds of national activities under in 2008. Competitors drive a course of several that large items such as roof racks, roof boxes will also give a reduction of X per cent in CO2 to simulate urban driving, drivers will often the Ecodriven banner, from the production of hundred miles over two days and compete for and bike carriers play havoc with the emissions. Smarter driving also brings other achieve savings of around 15 per cent – and posters, leaflets and freebies that promote the lowest fuel consumption. The event has manufacturers’ careful designs and greatly benefits, most notably a reduction in accident some nearer 25 per cent. smarter driving, to running smarter driving some high profile sponsors and achieves good increase fuel consumption at medium to high rates, primarily because of the emphasis that competitions in conjunction with vehicle media coverage. speeds54. A study by IDEA in Spain concluded 49 http://www.spritspar.at/ smarter driving places on greater anticipation. Our experience from working extensively on manufacturers, to developing electronic and that at 120 kph (75mph) a typical roof rack can 50 http://www.neues-fahren.de/neues-fahren/default.htm Several smarter driving campaigns, including smarter driving initiatives gives us confidence web-based tools to promote the concepts. increase fuel consumption by 16 per cent and a 51 http://www.dft.gov.uk/ActOnCO2/ SAFED45 in the UK and the long running Dutch that most drivers will be able to achieve 15 per roof box by 39 per cent. The advice therefore is 52 http://www.tfl.gov.uk/roadusers/smarterdriving/5564.aspx 45 http://www.safed.org.uk/ 53 http://www.mpgmarathon.com/ 46 campaign “Het Nieuwe Rijden “ have in fact cent fuel/CO2 savings if they follow smarter 46 http://www.hetnieuwerijden.nl/ to remove roof racks, bike racks etc when not 54 At low speeds air resistance (drag) is low, so items such as roof racks incur little penalty led with joint environmental and safety driving advice. 47 http://www.treatise.eu.com/ in use. 55 http://www.ademe.fr/anglais/publication/pdf/clim_auto_gb.pdf 48 http://www.ecodrive.org/ 56 http://www.treatise.eu.com/UserFiles/TREATISE%20Ecodriving,%20July07(1).pdf

24 DRIVEN DRIVEN 25 7. CO2 Legislative and Policy Developments 7 The introduction of graduated CO2 based VED is very encouraging CO2 legislative and as a way to incentivise the shift towards lower Policy Developments CO2 vehicles

European-level new car CO2 targets Although the UK market has higher average graduated according to CO2 emissions as shown initiatives62. To date, however, the actual levels CO2 emissions targets for new cars are set at a emissions than mainland Europe (Figure 7.1), in Table 7.1. In 2006, Band G, for vehicles over of fiscal incentive under the UK scheme have European level, as opposed to within the UK. the government’s recently published King 225 g/km, was added to separate very high- unfortunately not been strong enough to The UK new car market accounts for 2.5 Review59 fully supports the target, and further emitting vehicles into a further band. Band G significantly influence new car purchasing million sales and is, to some degree, a subset of recommends a longer-term target of 100 g/km vehicles are currently charged £400 per annum (see section 5). the wider European market, which has annual to be met by 2020. Other recent developments in VED. sales of approximately 15 million cars and include an agreement that Germany and There are two critical, distinct areas where accounts for 33 per cent of all new car sales France will ‘phase in’ the law, which may result The 2008 budget announced a number of CO2-based fiscal drivers can influence the worldwide57. European new-car CO2 targets in a delay in implementation. changes to the VED system which achievable market: at the point when a consumer have been a hotly debated topic over the past introduced in 2009/10. These are shown in Table purchases a new car; and on second-hand few years, particularly more recently due to the Vehicle Excise Duty 7.1. In 2009, there will be 6 new VED bands vehicle residual value. proposed introduction of mandatory targets. In the Chancellor’s budget in 2001, a lower graduated according to CO2. A new Band M for rate of Vehicle Excise Duty (VED, also known as the highest emitting cars (> 255g/km CO2) will Until now, first-year VED level was the same as European voluntary target road tax) was announced for owners of vehicle pay £425. The standard rate of VED will also be across the whole life of a vehicle. This limits its In 1998, an agreement was signed between with an engine size of less than 1549cc (£115 reduced in 2009-10 for all new and existing cars influence at the critical new-car purchase stage, the European Commission and the European per annum reduced from £180) and applied to that emit150g/km CO2 or less. There will also be as it is a small sum to pay relative to the cost of Automobile Manufacturers Association (ACEA) vehicles registered prior to March 2001. This a new, higher, first year VED rate for higher CO2 the car. on a voluntary basis to target the market to was largely because it was not mandatory to new cars. achieve an average of 140 g/km CO2 by 2008, state the CO2 emissions for new vehicles sold Research undertaken by the Energy Saving

2 61 which represents a 25 per cent reduction on prior to this time, and engine size is a crude The introduction of graduated CO based VED is Trust showed that introducing a VED level of Table 7.1: CO2 Based Graduated Vehicle Excise Duty (2008-2011) the 1995 average of 186 g/km. However, it is proxy for CO2 emissions. very encouraging as a way to help incentivise the £600 on 225 g/km car has a significant 2008-091 2009-10 2010-11 now apparent that the target (Figure 7.1) is shift towards lower-CO2 vehicles. The ground- negative impact on the residual value63 of a likely to be missed by nearly 20g/km at the end Vehicles registered from March 2001 (which are breaking nature of the scheme has been such vehicle (and poor residual value usually means VED band CO2 Standard CO2 Standard First year Standard of 2008. required to have stated CO2 emissions60) are that several other European countries have a car is scrapped earlier). emissions rate emissions rate rate rate4 subject to vehicle excise duty which is started to follow suit with their own CO2-based (g/km) (g/km) European mandatory 130g/km The Sustainable Development Commission has A Up to 100 0 Up to 100 0 0 0 CO2 target previously recommended very high VED levels for B 101-120 35 101-110 20 0 20 As a result of the limited progress made Figure 7.1: Sales Weighted Average CO2 Emissions progress Europe (ACEA) vs. UK to European Targets the highest CO2-emitting vehicles. However, against the voluntary target, the European given the impact on residual values, we believe it C 121-150 120 111-120 30 0 35 Commission initiated proposals in early 2007 195 is more effective and viable to make smaller VED 190 to introduce a mandatory CO2 target, which increases from lower down the CO2 emissions D 151-165 145 121-130 90 0 95 includes penalties for manufacturers who do 185 range, i.e. 160 g/km and above. E 166-185 170 131-140 110 115 115 not achieve the average target across their 180 vehicle sales. The final target is still currently 175 Furthermore, the higher first year VED levels F Over 1862 210 141-150 120 125 125 UK (All) under discussion, but the proposal is for 170 announced in the 2008 budget for new high G Over 2263 400 151-160 150 155 155 manufacturers to achieve sales-weighted 165 CO2 vehicles are also welcome as they will Emissions (g/km) emissions of 130 g/km across their range of 2 start to help further influence new car 160 H 161-170 175 250 180 ACEA vehicles, with a further 10 g/km reduction to be 155 purchases, where the intervention previously delivered through ‘complementary measures’58. has been limited. I 171-180 205 300 210 150 145 J 181-200 260 425 270 2008 ACEA Target 140 57 ACEA (2006) ‘Motor Vehicle Registrations’ http://www.acea.be/images/uploads/ K 201-225 300 550 310 135

VEHICLE_REGISTRATIONS_2006.pdf verage New Car CO 2002 EU Target 58 to promote efficiency such as such as gear shift indicators and other ‘bolt-on’ A 130 61 HMT (2008) Financial Statement and Budget Report. http://www.hm-treasury. L 226-255 415 750 430 technologies (see section 4 for further details) 125 gov.uk/media/2/5/bud08_chaptera.pdf 59 HMT (2008) The King Review of Low Carbon Cars Part 2: Recommendations for Action 62 ACEA (2008) ‘Overview of CO2 Based Motor Vehicle Taxes in the EU’ http:// M Over 255 440 950 455 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 60 Vehicles type approved in category M1 and registered on the basis of CO2 www.acea.be/images/uploads/files/20080302_CO%202%20tax%20overview.pdf emissions by EC whole vehicle type approval (Vehicle CO2 emissions are shown on Year 63 This can also have an impact on new purchase decisions in circumstances where 1 2008-09 rates effect from 13 March 2008. 2 Cars registered before 23 March 2006. 3 Cars registered on or after 23 March 2006. the V5/ V5c document). whole life costing is undertaken, such as with most company car purchases 4 Alternative fuel car discount: 2009-10 £20 bands A-I, £15 bands J-M: 2010-11 £10 all cars.

26 DRIVEN DRIVEN 27 7. CO2 Legislative and Policy Developments

Figure 7.2: customers will already have chosen the car they The initial scheme had a flat £5 per day charge Fleet vehicle CO2 reduction policy In addition to company car tax (benefit in kind) by businesses are now placed in two capital UK New Car want. The CO2 label is currently being updated (payable on the day), which has now increased developments there are a number of other less well-known allowance ‘pools’ according to their emissions. CO2 Label by LowCVP to account for the recently to £8. The annual estimated CO2 savings of the In addition to the CO2 reduction policies noted fiscal policies that affect company cars and Cars above 160 g/km receive 10 per cent writing announced changes to vehicle excise duty. scheme are 110-120,000 tonnes. From October thus far, which apply to all vehicles, the have CO2 implications: down allowance, compared with 20 per cent 2008, it has been announced that the scheme following developments have occurred between 111 and 160 g/km. However, cars with Fuel duty will change to a CO2 basis, where high-emitting specifically within the fleet market. Prior to For each case, examples of cost savings on emissions of 110 g/km or less get 100 per cent In 1993, the Government introduced the fuel vehicles (> 225 g/km) will have to pay £25 per 2002, company car tax was calculated on low-CO2 vehicles are provided based on first year writing-down allowances, which can duty escalator, which set fuel taxes to rise at 3 day for entry into the zone, and low-emitting the number of miles driven by an employee purchasing and running a diesel vehicle provide considerable savings to a business. per cent above inflation in order to discourage vehicles (≤ 120 g/km) will receive 100 per cent within a tax year. Because it was based on with band B CO2 emissions (<= 120 g/km) car use for environmental reasons and to fund discount. The Energy Saving Trust is supportive non-incremental mileage thresholds, this crude vs. a diesel with band D CO2 emissions. Tax relief for leased cars: public services. This continued until 2000 when of the CO2-based scheme, although there is system had detrimental effects in terms of (151-165 g/km). Both vehicles are assumed to For companies that lease cars, it was scrapped because of protests against some concern that the lower 121 g/km level emissions as it actively incentivised employees cost £17,000 (or monthly contract hire charge 3 a proportion of rentals is currently high oil prices66. may be not be low enough, as there are many to strive to drive more than 18,000 miles per of £300 per month). disallowed75 for corporation tax purposes Passenger car fuel consumption more sub-121 g/km cars available on the year in order to secure a lower tax charge depending on the value of the car. The amount and CO2 information regulations 64 65 Fuel duty and VAT currently account for market than when the change was initially (15 per cent)72. Employers national insurance of disallowance varies from 0 per cent for In 2001, legislation was put in place to help approximately 70 per cent of fuel prices at the proposed by TfL. This means that close contributions: vehicles below £12000 up to 25 per cent improve consumer awareness and understanding pump and current policy is for fuel duty to rise monitoring will be required to understand The 2002 Budget changed the calculation 1 Employers are liable to pay national disallowance for vehicles over £24000. of fuel consumption and CO2 emissions of each year at least in line with inflation. whether there are negative impacts in terms of basis from mileage to one based on the CO2 insurance contributions (Class 1A NIC) based on vehicles linked to VED. The legislation requires However, the latest planned 2p rise has been congestion and higher CO2 emissions resulting emissions of the vehicle being driven. the taxable value of a vehicle. For 2009, the This regime will change in April 2009 such that that fuel consumption and CO2 data is displayed deferred from April to October 2008 and this from the sub-121 g/km discount. Finally, the By removing the high mileage incentive and annual charge is calculated by multiplying the any car with emissions of more than 160 grams on point-of-sale and promotional information deferred rise is again under discussion in current set up of the London congestion instead encouraging employers and employees purchase cost of the vehicle (P11D value) by the will have 15 per cent of lease rentals disallowed, for all vehicles. The data shown must be specific response to recent rises in fuel prices. Further charging scheme is likely to be reviewed with to choose the lowest CO2-emitting vehicles, relevant CO2-based BIK percentage (shown in whilst lower emission cars will have no rental to the model (e.g. VW Golf 2.0 TDI S) vehicle rises are planned for April 2009 and 2010. the election of the new mayor Boris Johnson. this reform revolutionised the fleet market. Table 7.2). This value is then multiplied by 12.8 disallowance. Clearly a strong incentive for fleet being promoted. Details can be found on the Budget website67. Since 2002, the new company car tax bands per cent to work out the annual tax charge74. purchases to favour cleaner cars. Other types of road charging schemes are have reduced by 5g/km each year since the Cost savings for a diesel vehicle with band B A voluntary agreement amongst government Congestion charging currently being investigated by the Department scheme was introduced to help promote the CO2 emissions would be of the order of £220 Tax on ‘free’ fuel76: Employer-provided and the motor industry led by the Low Carbon Congestion charging was first introduced by for Transport, for example the road Pricing continual reduction in CO2 of fleet vehicles. per year compared to a band D vehicle. ‘free’ fuel is viewed as a taxable Vehicle Partnership (LowCVP), gave rise to the the Mayor of London in February 200368 as Demonstrations Project. Further information is 4 benefit. The taxable amount is launch of the new-car CO2 label in 2005 a way of limiting congestion in the capital. available on their website70. From April 2008, the minimum threshold has Capital allowances calculated using the same CO2-based tax (example shown in Figure 7.2). The most recent been reduced to 10 per cent (13 per cent for 2 treatment of business cars: percentages shown in Table 7.2. 2008/09 has compliance survey carried out by the LowCVP diesels) for band B cars (≤ 120 g/km CO2), This relates to limits on tax relief on seen an increase in the fuel scale charge from Table 7.2: Taxable Percentages of Company Car Purchase Price71 found that in 2007, 68 per cent of all new cars making it attractive for the employee to company profit from expenditure on the hire or £14,400 to £16,900, meaning that a typical Per cent of P11D price 2007/8 2008/9 2009/10 on sale in dealerships displayed the label. The choose a very low CO2 vehicle. A summary purchase of vehicles. The 2008 budget higher-rate tax payer needs to drive to be taxed CO2 (g/km) CO2 (g/km) CO2 (g/km) introduction of the label has been a success and table of company car tax bands is shown in announced the replacement of the partially approximately 10,000 private miles per year to a step forward in providing consumers with 10* - 120 120 Table 7.2. The 2008 Budget announced that emissions-based scheme relating to tax relief break even (the average private mileage for a necessary information. However it has suffered 15* 140 135 135 from 2010-11, the level of company car tax on expensive cars with a completely emissions- lower rate tax payer is about 5,000 miles). from criticism not as a result of the label its self, 16* 145 140 140 will be increased on all cars emitting 135 g/km based approach from April 2009. Cars bought but because to date, the label has not been 17* 150 145 145 or more. used widely within car advertising or through 18* 155 150 150 other information and advice channels. 19* 160 155 155 Of all the UK CO2-based schemes, this has had Currently, the consumer only sees the label on 20* 165 160 160 the most marked impact on the CO2 emissions the car in the showroom, limiting its potential reductions, indicated by Figure 4.1 on page 10. 21* 170 165 165 impact because by the time they see it, many An HMRC evaluation of the scheme estimates 22* 175 170 170 savings of 0.2-0.3 MtC per year in 200573. 23* 180 175 175 24* 185 180 180 64 http://www.dft.gov.uk/pgr/roads/environment/thepassengercarfuelconsumpti3850 25* 190 185 185 65 Passenger Car (Fuel Consumption and CO2 Emissions Information) regulations Guidance Notes. http://www.vca.gov.uk/additional/files/fcb--co2/enforcement-on- 26* 195 190 190 advertising/vca061.pdf 27* 200 195 195 66 BBC News (2000) ‘UK protests trigger fuel shortages’ http://news.bbc.co.uk/1/ 28* 205 200 200 hi/uk/918105.stm 67 HMT (2008) ‘Budget 2008’ http://www.hm-treasury.gov.uk/budget/budget_08/ 29* 210 205 205 72 15% of the P11D value (list price) of the vehicle multiplied by employee tax bracket bud_bud08_index.cfm 30* 215 210 210 Tax was charged at 35% for the first 2,500 miles, 25% for 2,501-18,000 and 15% for over http://www.tfl.gov.uk/roadusers/congestioncharging/6725.aspx 18,000 miles/annum. These bands are non-incremental (i.e. driving 2,499 miles results in a 69 Transport for London (2007) ‘Central London Congestion charging Scheme: 31* 220 215 215 total BIK calculation charged at 35%, whereas driving 2,501 miles is based on 25%). ex-post evaluation of the quantified impacts of the original scheme’ http://www.tfl. 73 http://www.hmrc.gov.uk/budget2006/company-car-evaluation.pdf 32* 225 220 220 74 E.g. on a diesel vehicle costing £17k in CO2 band B (e.g. VW Gold Bluemotion), the gov.uk/assets/downloads/Ex-post-evaluation-of-quantified-impacts-of-original- 33** 230 225 225 annual charge would be £277 compared £499 to an equivalent £17k diesel vehicle in CO2 scheme-07-June.pdf band D (e.g. Vauxhall Astra 1.9CDTi 120ps Design 5 dr) (saving £222). 70 Department for Transport (2008) ‘Road Pricing Demonstrations Project’ http:// 34*** 235 230 230 75 Registered on or after 17 April 2002 www.dft.gov.uk/pgr/roads/roadcongestion/roadpricingdemoproject/ 76 Further details can be found at http://www.comcar.co.uk/newcar/companycar/ 71 P11D Value 35**** 240 235 235 poolresults/gfuelben.cfm * Add 3 per cent for diesel ** Add 2 per cent for diesel *** Add 1 per cent for diesel **** Max charge, so no supplement 28 DRIVEN DRIVEN 29 Policy8. Consumer Car Choices and CO2 8

This review shows that across most segments of Firstly, consumers do not have easy access to the market, consumers are making poor choices easily understandable and persuasive when it comes to fuel efficiency and CO2 information on vehicle CO2 emissions which emissions of their new car purchases. Not only is might provide help when making a purchase this damaging in terms of contribution to global decision. The CO2 label is an encouraging step CONSUMER CAR warming given the high CO2 emissions of the forward in terms of providing CO2 emissions car market, but it also translates to higher information to consumers in an easily running costs for the consumer. understandable format (A-G label). However, the label is currently only found on the new CHOICES and CO2 Energy Saving Trust evaluation research has vehicle itself in the showroom, so is only seen shown that when consumers are asked to rank late in the consumer’s decision-making process factors that are important to them when (when they have often already chosen the car considering a vehicle purchase, fuel efficiency they want). comes third highest behind safety and price, and CO2 emissions are ranked lowest (Figure 8.1). Information on CO2 emissions is mandatory on One of the main challenges is that the casual all car advertising material, however this is only and brand, and influences car buyers to discount link between the two is not understood. provided as a number (e.g. 167 g/km CO2) in financial savings through improved fuel economy However, other more recent evidence is starting the small print. This is neither helpful nor in preference for higher specification. to show more consumer movement towards persuasive for the consumer, because the lower carbon vehicles. What Car? recently information is not placed in context. However, The very recent increases in fuel prices have released a poll which showed that two thirds of the Low Carbon Vehicle Partnership is working started to have an impact on vehicle choice in prospective car buyers will be looking to to help improve this in future. 2008. For example in May 2008, the mini purchase a greener car in the next twelve segment (a sub segment of the Supermini months. However, the main reason for this was Finally, the current structure of the market is segment as presented in Section 5.2 (on page to save money as opposed to being concern for that in general, the higher specification, 14) showed a 27.4 per cent increase in year to the environment, which was a lesser factor (19 more desirable cars tend to be higher emitters date sales compared to 2007. Furthermore, the per cent). What Car? suggests that this comes of CO2. This plays on the softer motivations trend to Diesel continues with an 8.4 per cent largely as a result of increased cost of living and associated with car purchases, such as status increase on May 2007 according to the SMMT. the recent changes to road taxes announced in the 2008 budget. Despite this, it remains to be seen whether this will translate into a real Figure 8.1: Consumer stated importance of main factors influencing car 77 change in car purchase trends. purchase decision (Rank 1-10)

An increasing number of people in the UK are 10 expressing a high level of concern about the 9 cost of motoring and greenhouse gas emissions 8 but, as shown in this review, this is not reflected in actual purchases made, so why is there such a 7 difference between attitude and action? 6

5 The King Review highlights that although consumers say that fuel efficiency is one of their 4 top criteria when making a vehicle purchase,

Mean Rank (1-10) 3 they heavily discount future cost savings from increased fuel efficiency when making a car 2 purchase. We believe that there are a number of 1 important reasons for this. 0 Safety and Price Good fuel Perform- Size/class Fuel type Availability Looks of CO2 security economy ance the car emissions Market Segment 77 Energy Saving Trust Evaluation (2007)

30 DRIVEN DRIVEN 31 9. Conclusions and Recommendations 9

The Energy Saving Trust runs a UK conclusions and wide network of advice centres, which provide advice on home energy recommendations efficiency, transport, renewables, water and waste to more than one

he love affair with the car energy efficiency in road transport, this could million consumers per year continues. And if the last 100 be reduced by up to 25 per cent in the next years are anything to go by, The new vehicles 5 years (1.62 MT CO2). This is ignoring it is not likely to diminish at registered in 2007 any improvements in vehicle technology, any point soon. In addition, which would provide additional savings. Tdriver expectation of comfort, safety and produce annualised So acting to deliver energy efficiency in the performance is ever-increasing, which emissions of 6.5 million new car market could be the solution that makes reducing CO2 emissions even more passenger cars need to reform its historically challenging as these features all increase tonnes of CO2 poor performance in responding to the vehicles’ weight. challenge of climate change. Figure 9.1 helps to illustrate the range of CO2 emissions of The evidence in this review shows that within This is encouraging as other sectors each segment of the market and indicates the almost all segments of the passenger car (such as domestic energy efficiency) are likely overall potential for emissions savings. market, many consumers are making poor to suffer diminishing potential for CO2 choices when it comes to CO2 emissions. reductions in future78. In addition to this, emissions across the whole This not only has a negative impact on car market79 could be further reduced by 10-15 climate change, but also represents a The new vehicles registered in 2007 produce per cent by taking greater action on smarter significant market failure: low-carbon annualised emissions of 6.5 million tonnes of driving measures and by reducing the number vehicles make more sense for consumers CO2. We predict that through achieving of miles driven. both economically and environmentally.

This is worrying news, as CO2 emissions are Figure 9.1: 2007 CO2 Emissions Range by Market Segment much higher than they need to be. However on the other hand, the findings also highlight that there are some easy wins that can 600 ● 2 reduce CO2 from the market by improving Absolute range of CO (g/km) emissions ● 90 per cent of sales consumers choices of cars from the range 500 available today.

400

300

200 Emissions (g/km) 2 CO 100

0 Super Mini Lower Upper Executive Multi Dual Luxury Specialist Medium Medium Purpose Purpose Saloon Sports

78 Due to high level targets set under the Supplier Obligatation (CERT) Market Segment 79 i.e. Second hand as well as new vehicles

32 DRIVEN DRIVEN 33 9 Conclusions and Recommendations

9.1 Recommendations for government higher CO2 vehicles, means that reducing fuel class information, the new car CO2 label and Finally, we support many of the other and the Energy Saving Trust and driving costs will rise up consumers’ are given verbal advice about CO2 emissions We support the EU’s recommendations to help promote CO2 The main recommendation arising from this agendas significantly over the next year. As more generally to help make the information information to consumers made within the review is to increase the level and scope of advice on low-carbon car purchase and smarter more relevant and useable (e.g. by explaining proposed approach to King review, notably: consumer transport advice being provided driving can significantly help, we believe that the financial benefits). regulate CO2 emissions through our network of advice centres from delivering more of this activity in 2009/10 will • Colour-coded road tax discs according to 2009/10. Currently there is a lack of awareness prove to be highly successful. • Advice on smarter driving. This enables CO2 emissions85. of this advice, and this is a significant customers who are not planning to replace contributory factor behind the poor choices Energy Saving Trust Consumer their current vehicle in the near future to also From 2009/10, we need additional resources to • Regulation of vehicle advertising to make made with regards to fuel efficiency and Transport Services take action to increase their fuel efficiency. scale up transport advice centres to meet this CO2 and fuel economy information more CO2 emissions. The Energy Saving Trust runs a UK wide network challenge. These are the areas that the Energy prominent, ideally showing the CO2 label to of advice centres, which provide advice on home Messages are focussed on emphasising the Saving Trust believes that an upscale service help provide relativity. Car manufacturers are starting to provide energy efficiency, transport, renewables and financial benefits of taking action, as this should cover: CO2 information more prominently in their water & waste to more than one million helps to influence a wide range of people. It is worth noting that there are some risks marketing and advertising80. This is helpful to a consumers per year. The centres also work in Currently the service is delivered through • Greater intensity of transport advice services associated with providing advice which will degree, but it is difficult for consumers to partnership with local businesses and delivery specialist transport advisors responding to provided through the advice centre network. lead consumers to benefit through greater fuel understand the meaning of CO2 information partners to increase the reach of their work. customer enquiries and cross-selling transport This will deliver considerable carbon savings, efficiency. For example, consumers may choose company car taxation. We welcome the without comparison to other vehicles within a Evaluation of our consumer audience showed advice to people enquiring on home energy as evaluation of the pilot service indicates to purchase larger vehicles, or drive more, developments in this field, however there has segment. There is also added value to be that in 2006/07 the services directly influenced issues. The advisors also organise a number of that consumers are more inclined to act on which can negate some of the benefits. been less progress made in the private market, gained from advice that is provided by an savings of 12 million tonnes of CO282. outreach transport events in their local areas. transport advice. For these reasons, there is also the need to which is not impacted by these additional independent, trusted source. continue simultaneously to strengthen other measures. We would therefore welcome The network is uniquely placed to provide An initial evaluation of the consumer transport • Increased proactive advice provision, for demand-side policy measures which promote further policy developments in the private transport advice to an audience that is already advice service provided by the advice centres example through local and regional road fuel efficiency in cars, such as fuel taxation and market to help further the shift towards The network is uniquely engaged on sustainable energy issues and (as a pilot in 2006/07) showed that most shows promoting best-in-class and smarter vehicle excise duty. low-carbon vehicles. placed to provide therefore more likely to take action. customers who recalled receiving advice had driving advice. taken some action either through smarter Other low-carbon policy As noted previously, it is particularly important to transport advice to an During 2008/09, the centres are starting to driving or vehicle purchase to increase their fuel • Advice on the CO2 performance of second- recommendations combine such measures with consumer advice audience that are already provide advice on low-carbon vehicle purchase efficiency83. This compares favourably with hand vehicles, enabling customers to search There is a continuing challenge for government and information to help consumers to act. and smarter driving with funding provided by home energy advice, where on average 40 per out the CO2 emissions of vehicles being to promote the shift to low-carbon vehicles engaged on sustainable the Department for Transport and the Scottish cent of people take action following advice. considered84 and providing low-CO2 through regulation and incentives. We support 9.2 Challenges for manufacturers Government. The service currently covers the alternatives. This would form part of a the EU’s proposed approach to regulate CO2 As noted earlier in this review, there are two energy issues, and following main activities: We believe one of the main reasons for this is tailored verbal advice service that captures emissions from passenger cars through setting very distinct types of low-carbon car on the therefore more likely to because transport advice is a new area, with customers at the point where they are in the a sales-weighted average target of 130 g/km. market: those which have novel low-carbon take action • Low-carbon vehicle purchase advice in direct more options for consumers to take positive early stages of their purchase decisions. The emissions of the UK market are slightly technologies (e.g. hybrids such as the Toyota support of the DfT’s Act on CO2 campaign. action. This further supports the case for higher than that of the European average, Prius); and a larger range of petrol and Customers looking to purchase a vehicle are significantly increasing the level of consumer • Increased work with local and regional so this target would encourage significant diesel-powered low-carbon vehicles. It is clear We believe that providing more independent advised to refer to DfT Act on CO2 best-in- advice provided on transport. partners to provide referral services to the change within the UK market to meet the that new technologies have a long way to go information and advice to persuade consumers advice centres. This would provide advice target. We also fully support a further target of before they become competitive, so the to take action will have a significant effect on tailored to the partner, for example providing 100 g/km or lower by 2020 to help provide potential for delivering energy efficiency in the reducing CO2 emissions in the near term, top tips on smarter driving could be continued certainty for the market. new car market in the near term hinges on through improving vehicle choice. The case for displayed at filling stations, information on improving sales of the latter. advice is also directly supported by the King the rolling resistance tyres at tyre Within the UK market, we support the further Review, which recommends the further replacement centres. development of fiscal policies such as vehicle Notwithstanding some recent exceptions, development of ‘best in class’ and ‘smarter excise duty differentials and fuel duty to traditionally fuelled low-carbon vehicles tend driving’ messages through proactive advice • Promotion of low-carbon vehicle purchase incentivise the uptake of lower carbon vehicles. currently to be the lower end or ‘bargain services81. at the point where consumers are starting In particular, we support further development of basement’ vehicles within a range of models to look for a replacement vehicle by working CO2-based purchase taxes, or first-year road tax (see Figure 9.2, page 36). They are therefore Furthermore, the current turbulent economic in partnership with car publications such as initiated in the 2008 budget. This is important, usually viewed by consumers as compromise situation in the UK, combined with very high as Autotrader. because as it is so small in relation to the purchases because the higher specification oil prices and increased vehicle excise duty for purchase price, vehicle excise duty has less of an (higher CO2) models are less affordable. There • Smarter choices advice – investigating public influence at the point of purchasing a new car. are a number of challenges for manufacturers transport services alongside regular journeys in order to help improve sales of these 80 LowCVP, Passenger Car Working Group (2008) made by customers in order to help The evidence in this review show that the traditionally fuelled low-carbon vehicles. 81 HMT (2008) The King Review of Low Carbon Cars Part 2: Recommendations for encourage better use of public transport in policy mechanisms which have had a Action (Recommendation 19). 82 Over the lifetime of measures acted on. favour of car use. particularly clear, positive effect on the market 83 Note of caution: As customer numbers were low for the pilot, these results can in terms of CO2 are fleet policies such as 84 For vehicles registered after 2001, where CO2 information is available only be used as a guide 85 Or some other form of labelling should discs be replaced in the future

34 DRIVEN DRIVEN 35 9 Conclusions and Recommendations

Advertising and Marketing of ‘Traditionally Fuelled’ Low-Carbon Cars

or many years, manufacturers Figure 9.2: Example of CO2 emissions distribution within the Ford Focus range have marketed the higher- carbon vehicles within a vehicle F range (see Figure 9.2) as better quality, more expensive, faster and more desirable, and thus influencing consumers to make less rationale choices with regard to fuel and other running costs.

The industry has also noted that low- carbon cars are more available on the market now than ever before, but that sales of them are low86. One of the Entry level Ford Focus 1.6 TDCI Range topping Ford Focus ST reasons for this is this rough correlation CO2 Emissions 115 g/km CO2 Emissions 224 g/km between performance and ‘desirability’. The only major way in which current range-topping vehicles are functionally different to lower carbon derivatives is in Improvement of ‘traditionally fuelled’ Weight loss and ‘bolt-on’ CO2 performance (and consequently CO2 low-carbon cars reduction technologies emissions). However driving at high speed Changing the market to help sell more Increases in vehicle weight have to a large is both illegal and dangerous on today’s low-carbon vehicles does not just depend on extent cancelled out the improvements in the congested roads. Furthermore, almost all advertising and marketing, although it is a very fuel efficiency of car engines over the last new low-carbon car models deliver more important part of the process. There are also a decade. Therefore, there is an imperative on than adequate performance both in terms number of ways in which the vehicles manufacturers to produce lighter cars. of acceleration and outright speed. themselves require development in order to This does not necessarily mean that significant improve sales: compromises need to be made in terms of the There is a very clear challenge for car in-car-entertainment or safety features that manufacturers to start marketing low- Desirability drivers have come to expect. However, the The combination of marketing and these encouraging some customers who would carbon vehicles as the new, top-quality Desirability needs to be significantly improved at focus must be on making cars lighter and improvements in desirability would help drive have bought larger vehicles to ‘downsize’. Surprisingly, superminis models of cars within their ranges87. this end of the market, so that low-carbon cars more energy efficient, in order to help the CO2 reductions that the market clearly has Thanks to their size, superminis are on average This may sound a little strange given that look and feel more attractive to the consumer. improve CO2 emissions across the new car the potential to achieve. Taking this approach comparatively low-carbon and therefore their are biased towards the it is the opposite of how the car market This will help to change the ‘compromise’ market. This is particularly important for high would not only be responsible in terms of CO2 increase in sales is encouraging. However, has traditionally functioned, but it is in image of these cars and help increase sales. energy-consuming devices such as air emissions, but it is also gives the customer the segment needs to stop further increases higher CO2 vehicles fact how many other consumer markets Some recently launched vehicles shows that conditioning88. Furthermore, the application what they really want – good quality, desirable in size and weight, and focus more on the work. For example within home appliances high-quality, low-carbon cars can prove to be a of add-on CO2 reduction technologies such cars with all the features and safety equipment lower-carbon end of the segment in terms of markets (e.g. kitchen equipment) the most very attractive package, for example the new as intelligent alternators, stop-start and low they expect - but with low running costs and marketing and development. efficient products are the top quality Mini Cooper Diesel, which at 104 g/km has the roll-resistance tyres should be introduced CO2 emissions. products, and their marketing reflects this. same CO2 emissions as a Toyota Prius. across the whole market. Increases in fiscal incentives, particularly for Market segment recommendations private purchasers, will have a greater impact Superminis here, as most sales are private and buyers in Surprisingly, superminis are biased towards the this segment are likely to be more sensitive to higher CO2 vehicles within the segment (see fiscal drivers. Almost all new low-carbon car models deliver Figure 5.5, page 14). Furthermore, this segment has grown significantly in recent years Finally, there is scope for increasing diesel more than adequate performance both in terms 86 ACEA (undated) ‘Highly efficient cars are available but not much loved’ http:// with comparatively poor progress in terms of sales (only 13 per cent in 2007) in order to www.acea.be/index.php/news/news_detail/higly_efficient_cars_are_available_ CO2 emission reductions. One of the main save carbon, as dieselisation has not affected of acceleration and outright speed but_not_much_loved/ 87 This must go hand in hand with developments in quality of traditionally fuelled causes of this is that these vehicles have been this part of the market to the same extent as low-carbon vehicles growing in size and weight, and therefore other segments. 88 ENDS Europe DAILY 2515 (2008) ‘EU Considers efficiency targets for car Air Con’

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Lower medium, upper medium It is therefore particularly important that these and MPVs segments work hard to improve their current, It is increasingly These segments occupy a very large proportion poor CO2 emissions performance. of the total new car market. Progress on worrying that SUVs are reducing CO2 emissions has been average-to- As these segments comprise high-quality, now the fourth largest good in this part of the market and has largely high-cost vehicles, they can be a good place come from the fleet market, through company to introduce new low-carbon technologies, contributor to the car taxation and dieselisation. However in as profit margins here can allow higher CO2 emissions of the terms of CO2, diesel and petrol vehicles development costs to be absorbed better than have not improved significantly in this part of in the rest of the market. This has been clearly whole market the market (the driver behind CO2 reductions demonstrated by manufacturers such as has been through buyers moving away from Toyota, through the introduction of hybrid petrol towards diesel). There is limited further technologies within its Lexus SUV and luxury applications such as agriculture. Therefore we potential for reductions in future through more saloon ranges. welcome the application of local measures diesel sales, so other means of achieving such as the London congestion charge and further CO2 reductions are needed. Although SUVs are not quite the worst urban council parking schemes designed to performing segment in terms of CO2 emissions, discourage urban use of the SUVs and other There is still some significant potential for they have earned themselves a bad press high CO2 vehicles. choosing lower-CO2 vehicles, so this should be through large increases in sales, particularly for pursued, but there should be an equal focus use in urban areas (where they have earned the Sports cars and other high here on improving the CO2 performance of the name ‘Chelsea Tractors’). Although sales are performance vehicles vehicles themselves through weight reduction now not increasing as quickly as in recent A relatively small number of consumers and applying ‘bolt on’ CO2-reduction years, it is increasingly worrying that SUVs are demonstrate a desire for high-performance technologies such as intelligent alternators, now the fourth largest contributor to the CO2 vehicles. This market segment is roughly split stop/start and low rolling-resistance tyres. emissions of the whole market. by vehicle weight and the super-light cars (e.g. Lotus Elise) produce significantly lower CO2 Executive, luxury saloon and SUVs Purchasers of many of these vehicles are able emissions than the heavier, larger-capacity Although these vehicles make up only a small to absorb high running costs, and therefore high-performance cars. This is demonstrated part of the market, they tend to be ‘flagship’ very significant actions are required to by the very wide range of CO2 emissions in models for manufacturers and are objects of discourage their use in less appropriate the sport car segment (see Figure 9.1, page 32). desire for many car-enthusiast consumers, applications. SUVs do have a role to play in a despite being affordable only to a few. rural context where they are used in suitable Action should be taken to help influence these consumers to purchase the lighter, smaller- capacity cars: these provide very similar levels of performance to heavier cars, but emit significantly less CO2. Due to the low sales available in order to increase sales of the The main action recommended in this review is here, this is not a high priority for the Energy lower-CO2 petrol and diesel models which are Increased uptake to increase the level of independent, proactive, Saving Trust. already on the market. We believe this is the key in-depth advice for consumers. With its network to delivering CO2 emissions reductions from the of Smarter Driving of regional advice centres, the Energy Saving 9.3 Final Summary car market in the short to medium term. initiatives through advice Trust is extremely well placed to deliver this In summary CO2 reductions can be best service over the next few years. achieved through action being taken to improve The main reasons for current poor vehicle services also has the energy efficiency throughout the car market and purchase choices are: Manufacturers also need to work hard to encouraging consumers to purchase the lowest potential to reduce CO2 improve quality and desirability of the carbon car in its class. • Lack of independent information and emissions by a further traditionally fuelled low-CO2 models within advice that makes CO2 information clearer their ranges in order to improve sales at this The range of CO2 emissions of new vehicles in and more prominent throughout the 10-15 per cent end of the market. each segment of the car market is very large, vehicle purchase process and encourages and consumers are currently making poor consumers to take action. This needs to be supported by further choices in terms of the CO2 emissions of their • The current market structure, where the approximately 2 million tonnes of CO2. This is development of other existing CO2 reduction vehicles. This is having a negative effect on CO2 more desirable cars tend to have higher equivalent to the annual CO2 emissions of a policies. Further action in this area would be emissions from cars and is also bad for CO2 emissions. third of a million houses, or a city the size of particularly welcome in the private market, consumers because it keeps running costs high. Glasgow89. Increased uptake of smarter driving where the signals to move to lower-carbon So the main opportunity for achieving energy Adopting measures to improve vehicle choice initiatives through advice services also has the vehicles are currently less strong than in the efficiency is through improving consumer’s could reduce the CO2 emissions of the new car potential to reduce CO2 emissions by a further fleet sector. choices of cars from the range of new models market by up to 25 per cent, which equates to 10-15 per cent. 89 This refers to household emissions only

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