Your car and carbon tax

South African motorists have yet to be charged for carbon tax when purchasing a new car, but the bill has been drafted and is likely to be implemented in 2017.

But, what would this mean for the country’s new car market?

Jeff Osborne, Head of Automotive for Gumtree SA, says that “carbon tax has been enacted in several European countries, including Finland, Denmark and the UK as well as in Australia and has resulted in a drop in new car sales”.

In January this year, car manufacturing giant, Toyota, predicted a 10% fall in their domestic market as a result of the introduction of carbon tax. “This prompts manufacturers to shift production to countries with no or lower carbon tax laws,” says Osborne.

Osborne warns that “if South Africa introduces a carbon tax, a car with an emission rating of more than 120g/km will attract a carbon tax of up to R7,800 per purchase and push new vehicle prices up by 2%, resulting in further sales drops”.

“We’ve seen the new car sales drop in SA by 12.9% this year while the used-car market grew by 9.5%,” continues Osborne; more likely to be a continued trend over the next few years, and an even more dramatic one with the introduction of carbon tax.

Gumtree Automotive, showcases more than 78,000 live vehicle ads and Osborne says he expects the rise in second-hand sales to continue as long as the economy remains in dire straits.

 

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