The Government has scrapped a proposed compulsory car marking scheme, saying the costs to motorists far outweigh the potential benefits.

The previous Labour government announced the scheme two years ago and it was to be introduced last August. However, parts of the motor industry opposed it and the Motor Industry Association won a court order preventing it from being introduced ahead of a High Court hearing. The hearing never went ahead.

Whole of vehicle marking involves applying the vehicle's identification number all over a car, using microdotting technology.

"If New Zealand introduced the scheme, it would be the only country in the world to have a mandatory whole of vehicle marking scheme, even though there is no domestic manufacturing industry," Transport Minister Steven Joyce said yesterday.

"It is far more cost efficient to add security features at the point of manufacture, rather than as part of the importing process."

Most vehicles were fitted with immobilising technology, which stopped a car running unless the right key was used.

"There is no evidence to prove that requiring vehicle marking would improve the results already achieved by immobilisers," Mr Joyce said.

Motor Trade Association communications manager Andy Cuming said it was estimated that only 10 per cent of imported vehicles would not have immobilisers by 2012.

"Modern automotive technology has now provided car owners in virtually all cases with engine immobilising security features fitted as standard, sharply reducing the number of thefts," Mr Cuming said.

"In our opinion, car owners can have their security concerns covered very effectively."

- NZPA