BMW 530d SE

THE Government's intention to base company car tax on carbon dioxide emissions from 2002 should have diesel manufacturers rubbing their hands together with glee. After years of declining sales and a pasting for being dirtier than petrol, diesel engines have finally had a reprieve. Diesels produce far less CO2 than petrol engines, something that will pander to the new tax rules and play into the hands of green lobbyists. The added bonus is that low-sulphur diesel will effectively replace regular fuel by the year-end after the March Budget reforms taxed regular fuel more than the 'green' variety.

It couldn't have come at a better time for BMW, whose new 3.0-litre six-cylinder common rail diesel engine went on sale in the 5-series earlier this year. It replaces the old 525tds and precedes the introduction of the new 136bhp 320d which will hit the showrooms in September, giving BMW a convincing argument for best-in-class diesels at a time when it couldn't be more important.

With a power output of 184bhp at 4,000rpm and peak torque of 288lb-ft at just 1,750rpm, the 530d claims its place as the most powerful production diesel car in the world. Such figures enable the 530d to deliver the seemingly impossible: high performance, class-busting economy and industry-leading exhaust emissions, questioning - even ridiculing - the Government's wisdom of this autumn's reduced road tax on smaller, supposedly 'greener', cars.

In all but badging, the 530d - available in SE trim only - looks identical to its petrol-engined stablemates, but it sits between the 523i SE and 528i SE models in terms of pricing Available in both saloon and Touring forms, the 530d SE costs ú29,235 (525tds SE ú27,810) for the manual saloon and ú30,455 for the automatic. The Touring adds ú2,050 to those prices, at ú31,285 for the manual (525tds Touring ú29,860) and ú32,505 for the automatic. Putting it into perspective, the saloon is ú1,360 more than a 523i SE and ú1,670 less than a 528i SE.

Such pricing puts the 530d among the most expensive executive diesels on the market, comparing with the likes of the Audi A6 2.5 TDI (ú29,000) and Mercedes E300 TD (ú32,570). Question is, is it a better prospect from a corporate point of view?