How will the Budget affect the motor industry?

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As the summer Budget was announced earlier this week, we have learned that there are going to be changes made to the UK’s vehicle excise duty (VED) system. From 2017, the current system will be mostly scrapped. Instead, varying VED rates will apply to newly registered vehicles depending on how much CO2 they emit. After the first year, it will be a flat rate of £0 for cars which emit no CO2, and £140 for all other vehicles, apart from those worth more than £40,000, which will face an extra £310 charge. It was also stated that from 2020, all revenue resulting from this tax will be used to improve the road systems in the UK.

This differs from the current system because at the moment, people who own low-emission vehicles pay no VED during the first year. There are concerns in the industry that the new measures could deter people from choosing low-emission cars as the incentive of zero VED has been removed. However, there are many other reasons to choose one of these cars, including reduced impact on the environment and lower running costs. Mitsubishi have stated that they are unconcerned about the changes as they believe customers will continue to choose their plug-in hybrids due to the numerous other advantages they offer.

It seems that opinions are varying widely across the industry as to how these alterations will affect operations. We look forward to seeing how these new changes will impact the motor industry and the production and purchasing of low-emission vehicles. Whatever happens, it seems certain that the automotive industry will continue to grow and evolve to keep up with the every-changing demands of customers, which means there will continue to be plenty of exciting and challenging new automotive jobs available.