BRITISH CAR TAXES

Gisborne Herald, Volume LXXII, Issue 21603, 4 January 1945, Page 4

BRITISH CAR TAXES

The British motor-car industry has been promised a powerful inducement to step up its drive for export trade after the war by the Government’s decision to change the basis of taxation from horsepower to engine capacity from January, 194 G. While British manufacturers believe the difference in taxation rates in favour of owners will be small in view of the fact that production for export is being concentrated on cars up to 14 h.p., it will probably mean that United Kingdom cars will capture some of the market enjoyed by the higherpowered American vehicle in this country. British industry, which has long laboured under the artificial handicaps created by the horse-power tax, will now, according to motor experts, be able ta. produce a better engine, with lower..revolutions, more life and easier cooling than under the old system which necessitated the construction of high-revving engines to produce the horse-power. The system of computing tax on a horsepower basis promoted the construction of light, small-engined cars suited to good roads and short distances, but not so well equipped to compete with the more powerfully-engined 1 American types in hilly country like New Zealand. In pre-war days many New Zealanders, though preferring to purchase a British car, have been compelled by force of circumstances, to buy an American one because it was better suited to their needs. To offset this disadvantage in the export trade, some British manufacturers built special models to cater for the demand, but the cost factor largely nullified their enterprise. The economies of mass-production are so large that unless the whole output of a big factory is of a standard 1 design, the vehicle cannot be marketed at a sufficiently attractive price. The sweeping away of old barriers to technical progress in engine design, however, will give the British industry new hope and incentive and it should not be difficult to produce new models embodying the latest advances, equally well adapted to home and overseas demands. The impending alteration in the system of motor-car taxation Is further evidence of the radical changes Britain is making to tier industrial methods to enable her industries to surmount present handicaps and resume leadership in overseas trade after the war.