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Honda plans low-tax fleet special

Date: 28 June 2010   |   Author: Tristan Young

Honda is planning to take on low-CO2 specials such as the VW Golf Bluemotion and BMW 116d with its own low-tax Civic.

However, Honda's fleet department, being unable to change their car's CO2 output, has cleverly turned to a P11D price-cut to achieve the same tax win that a CO2 drop would achieve.

Only available to VAT registered companies who promise to keep the car from more than 12 months, the Civic Ci is based on the Si model but adds Bluetooth. However the Ci has a P11D price more than £3000 less than the Si.

The 1.4-litre petrol version gives the Civic a lower tax payment rate than either the Golf or the BMW, according to Honda corporate sales boss Graham Avent.

The model was devised after Honda noticed a trend within the small family market of buyers shifting toward cars with a CO2 output below 121g/km for CO2. However, the firm's research found that company car drivers were searching car lists on Excel spreadsheets by tax payments, rather than CO2 band or lease rate.

Avent said: "We asked 'how do we make the Civic more compelling to the corporate customer?' The answer was to make it as tax efficient as possible. As a fleet person it's not possible to alter the CO2 output, so we have to reduce the P11D value.

"The Civic Ci is not on and the cars won't be in showrooms, but information will be available in dealers and for fleet customers."

The P11D saving and subsequent upward effect on the residual value percentage has a 6ppm effect on running costs, according to Avent.

Avent expects the new fleet trim level to account for 8% of Civic sales.

When quizzed about those fleets with CO2 limits for their car lists, Avent said Honda research last year within the top 100 fleet operators showed only two fleets had a 120g/km limit with most other fleets having either a 160g/km limit or no limit at all.

"The Civic Ci is not on and the cars won't be in showrooms, but information will be available in dealers and for fleet customers through company intranets and leasing company systems," added Avent.

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