Clarke urged not to stall motor upturn

MOTOR industry leaders forecast yesterday that car production would rise by 100,000 next year and new car sales by 80,000, but only if the Chancellor avoided tax increases in this month's Budget.

In a final plea to Kenneth Clarke, the heads of Ford, Vauxhall, Rover, Peugeot-Talbot and Nissan urged him not to wreck the car market's fragile recovery by imposing extra costs on manufacturers and customers.

They also called on the Chancellor to tackle the pounds 50bn budget deficit by curbing public spending and to stimulate economic recovery through further interest rate cuts.

According to industry estimates, new car sales should rise from a forecast 1.77 million this year to 1.85 million in 1994, while production should increase to 1.45 million. However, there are fears that a tax- raising Budget and negligible growth in Continental markets could combine to frustrate these forecasts.

Geoffrey Whalen, managing director of Peugeot-Talbot, said: 'This is a concern we think the Chancellor ought to understand. The last thing we want as an industry and as an economy is a substantial additional burden of taxation on top of the pounds 6.7bn the previous Chancellor has landed us with from next April.'

The message was reinforced by Ian MacAllister, chairman of Ford, who warned against any increase in VAT on cars and employers' National Insurance contributions, and changes in company car taxation.