FRANKFURT -- Efforts to slap heavier taxes on SUVs could heat up Europe's autumn as the highest energy prices in decades put a spotlight on the powerful vehicles that environmentalists love to hate.
France has proposed raising taxes on some SUVs and other fuel-slurping cars while giving tax breaks for smaller and cleaner vehicles, a step now on hold after German howls that such an action smacked of blatant protection for French automakers.
The mayors of London and Paris have led a popular backlash against the bulky vehicles that they say clog city roads and pose a hazard to pedestrians and drivers of smaller cars.
Even motoring-mad Germany is set to abolish a tax loophole that makes it cheaper to own heavy SUVs than other cars.
Sector analysts tend to take the campaign in stride, figuring drivers who can afford the pricy vehicles will shrug off any additional tax or congestion charges.
"If you have that kind of money you are not worried by it," said Stephen Cheetham, auto analyst at Sanford C. Bernstein.
But automakers -- especially in Germany -- growl that times are hard enough without facing fresh levies on one of the industry's fastest-growing and most lucrative segments.
Any new tax "is always a burden, and we see every month how hard the market is," said Eckehart Rotter, spokesman for the German automotive industry association VDA.
German Chancellor Gerhard Schroeder has warned France that bilateral ties would suffer if Paris undercut German carmakers such as DaimlerChrysler, BMW, Volkswagen or Porsche, whose SUVs meet brisk demand.
France's plan is on the back burner until the government holds talks with carmakers and the European Commission.
Under the initial proposal, drivers of the dirtiest cars could be charged more than $3,678 while owners of the cleanest could get tax breaks of as much as $985..
The move could favor domestic manufacturers PSA/Peugeot-Citroen and Renault, for whom more efficient diesel cars account for almost half of sales, and penalize their German rivals, which depend more on chunkier models.
PSA and Renault both say they favor plans to encourage motorists to opt for more environmentally friendly cars, but that such measures should not be announced too far in advance since it could upset spending habits and prompt a rush on SUVs.
Japanese manufacturers like Toyota Motor Corp, Nissan Motor Co Ltd. and Suzuki Motor Corp. also stand to feel the pinch from any higher European taxes on SUVs.
Toyota's RAV4 model was Europe's best-selling SUV last year with nearly 100,000 units sold, ahead of Nissan's X-Trail, Suzuki's Vitara and Ford brand Land Rover's Freelander, according to J.D. Power-LMC Automotive Forecasting Services.
Ironically, Renault has a 44 percent stake in Nissan.
BAN THEM, TAX THEM, SLAM THEM
Paris's Socialist-run City Council may ban them from the city center, while London's mayor, Ken Livingstone, backs plans to double the standard $9 congestion charge for SUVs, whose drivers he has called "idiots" with more money than sense.
Claude Mandil, head of the International Energy Agency, got in on the act in June when he recommended that China -- whose car sector is booming -- refrain from buying too many SUVs.
"Please do not make the same mistakes as the western countries have," he said.
SUVs have grabbed about 5 percent of the western European market by bucking a wider decline in overall car sales. Some 100,000 more SUVs hit the road last year, and J.D. Power-LMC says this gain could repeat itself in 2004.
Customers like the visibility and sense of safety that tall SUVs afford, said Don Hume, Land Rover's head of corporate and governmental affairs.
But the Freelander class of SUV is no longer than an average family sedan and emits less carbon dioxide than a standard London black taxi, he said in their defense.
"There is a lot of misleading and factually incorrect information out there about SUVs," he insisted.
In any event, carmakers argue, European SUV drivers are already penalized by fuel taxes that can absorb around 70 percent of what fuel costs at the pump.
"The biggest, thirstiest large minivans, large pickups and SUVS are barely sold in any mix at all in Europe, so the actual environmental impact of banning SUVs from the center of Paris would be very small indeed," Sanford Bernstein's Cheetham said.