A battle with European regulators over emission rules has been won by the car companies thanks to a deal that waters down tough new carbon dioxide regulations.
UK MEPs had feared that they would have hit luxury-car companies and producers of niche models such as London black cabs particularly hard.
Original targets cut CO2 emissions from 158g per kilometre to 130g/km by 2012. These will now be phased in over three years so that manufacturers only having to meet them in all their vehicles by 2015. But a new 95g/km by 2020 long-term target will be added.
Transport secretary Geoff Hoon said: "This agreement represents a good deal for the environment and a good deal for UK business. It will drive fuel-efficiency improvements in new cars, help to tackle CO2 emissions and reduce running costs for drivers.
"The challenging long-term target for 2020 was a principle that the UK was amongst the first to call for earlier this year. This has potential to be the biggest CO2 saving measure in transport."
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