Audi News
Prestige Carmakers Face Tax on Innovation in Australia
By source: Audi Australia Pty Ltd
May 12, 2008, 11:05

Prestige carmakers, like Audi, are facing a tax on innovation and clean emission technology with the Federal Government’s proposed increase in luxury car tax from 25 percent to 33 percent for cars above $57,000.

This tariff increase will have serious ramifications for the competitiveness of the Australian automotive industry, and the car-buying public in general, says Audi’s managing director, Joerg Hofmann.

“The Federal Government’s surprise tax increase could see the price of premium cars rise unnecessarily, affecting families and individuals who are prepared to invest in motor vehicles with the latest technological innovations – from advanced safety and driver assistance systems, to cleaner, greener engine technology,” Hofmann said.

Hofmann says he trusts that the Prime Minister will, nonetheless, stick to the Government’s scheduled reduction in tariffs on imported cars from 10 percent to 5 percent from 2010.

“I hope Mr Rudd will honour the original agreement, reducing import tariffs in 2010,” Mr Hofmann said.

Citing the tax hike as ‘disappointing’, Hofmann says that for over 100 years, Audi has been at the forefront of innovation, pioneering key technologies which are today taken for granted, even in mass market vehicles. The company was the first to introduce now basic safety features like safety glass, and even pioneered side impact and rollover testing.

“These kinds of technological advancements will be at risk with the Government’s proposed new, higher tax rate on luxury cars,” Hofmann said.

“For years now, our global headquarters have also invested heavily in important research and development. One key development has been the systematic reduction in fuel consumption and carbon emissions for its vehicles. This year, Audi will introduce the world’s cleanest diesel technology in its new A4 3.0 TDI quattro sedan – a new car with a 90 percent reduction in NOx emissions.

“The Government has a direct interest in making cars safer and cleaner, yet has effectively put this kind of technology at risk for Australian buyers, a move that seems directly at odds with its green agenda.

“The decision may also put Australia’s competitiveness into question. At a time when free trade agreements are being made globally, Australia risks isolating itself as the only country with a Luxury Car Tax LCT.

“If this tax increase is truly intended to help reduce inflationary spending, then where is the tax hike on expensive jewellery, luxury powerboats or private jets?,” Mr Hofmann added.

Demonstrating it’s commitment to the Australian market, late last year Audi announced its plan to invest more than $150 million in its retail network. The company is directly responsible for more than 800 jobs.

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