Motorists should be given cash incentives for buying more fuel-efficient cars and penalized for purchasing inefficient vehicles, the New Zealand Business Development Council for Sustainable Development says.

In a new report, the council suggests an incentive of NZ$3,000 ($2,066) for vehicles with a fuel efficiency of 38 mpg (6.5 L/100 km) or better and NZ$1,500 ($1,033) for vehicles achieving 28 mpg-36 mpg- (8.5 L/100 km-6.6 L/100 km-) at their first registration.

But the group says vehicles with fuel efficiency worse than 20 mpg (12 L/100 km) should be subject to a NZ$2,000 ($1,378) penalty.

For diesel, the NZ$3,000 rebate would go to vehicles achieving 40 mpg (6 L/100 km) or better and the NZ$1,500 rebate to vehicles achieving 30 mpg-39 mpg (7.9 L/100 km-6.1 L/100 km). The NZ$2,000 penalty would apply to vehicles failing to achieve 21 mpg (11.1 L/100 km).

“For the most fuel-efficient vehicles, the business council is recommending a grant of up to NZ$3,000, with a lesser grant of NZ$1,000 ($689) for used imports 7-years old or less,” council CEO Peter Neilson says.

"This would be a win-win, with companies getting the benefit of paying less and the individual getting a bonus for making the shift," he says.

Neilson says recent higher fuel prices have helped push sales for smaller and more fuel-efficient vehicles, but for many individuals and businesses, the additional purchase cost of these vehicles, particularly hybrids, over standard vehicles have stopped them from making the move. (See related story: NZ Sales Still Ahead of Year Ago But Starting to Slow)

“This is not a case of benefiting the well-off and penalizing owners of big cars,” Neilson says. “The business council wants to maximize energy efficiency, lower emissions and enable people to buy safer vehicles.

“A more fuel-efficient fleet of vehicles of various types and sizes is an effective way of achieving that over time. A big car does not have to be a gas-guzzler.

Ford Escape Hybrid

“SUVs like the Ford Escape Hybrid and the Toyota Highlander Hybrid have fuel economy superior to most of the standard, medium-size vehicles on our roads today.”

Neilson says although New Zealand enjoys one of the highest ratios of car ownership to population in the world, this comes from having one of the oldest car fleets in the Western world.

“The typical car we drive here is now much less fuel efficient, more polluting and less safe than the current models being produced in Japan or Europe,” he says.

Under the council's proposal, vehicles with engines eligible for a NZ$3,000 or NZ$1,000 payment include the Audi A4 2L diesel, Honda Jazz 1.5L gasoline version, Daihatsu Sirion 1.3L gasoline, Peugeot 307 2L diesel, Holden Barina 1.4L gasoline, Toyota Prius 1.5L and Honda Civic 1.3L hybrid-electric vehicles.

Vehicles with a NZ$2,000 or NZ$1,000 penalty would include the Ford Falcon XR8 5.4L gasoline, Mazda RX8 2.6L gasoline, Holden Commodore Executive 3.6L gasoline, Subaru Legacy 3L gasoline and Toyota Hilux 4L gasoline versions.