German carmakers are squaring up to their Government over its plans to increase monthly taxes on company cars by 50 per cent. The rise would cost the typical driver an extra £63 per month – or 2.3 per cent of disposable income.

BMW sells 60 per cent of its cars into the corporate sector, and DaimlerChrysler 40 to 50 per cent. German car market observers are already suggesting that the tax rise will reduce German car sales by around 50,000 to 70,000 units – or by 2 per cent of annual sales.