Volkswagen has introduced a new 'sporty' model to the Golf range. Golf Sport slots in below the GT TDI and GT FSI, combining the 1.6 FSI and 1.9 TDI engines of S and SE Golfs with the more racey appearance of the range-topping models.

It's expected to appeal to customers who want the looks but who don't need the extra performance. The new model has lowered sports suspension, front sports seats, 16-inch alloy wheels and body-coloured bump and side strips.

Sport sits alongside the Golf SE, offering customers a host of extra equipment over the S model. This includes a multifunction computer, alarm with interior protection, air conditioning and a CD player.

BMW will sell a diesel-powered X3 sports utility vehicle from October in a desperate bid to cash in on derv sales.

At launch earlier this year, company bosses admitted that they had underestimated the diesel market and would only be able to sell petrol models for the first few months. Now the first diesel engine has been revealed - a 2.0 capable of producing 150bhp and 330 Nm of torque. The unit is capable of 0-62mph in a shade over ten seconds, with a top speed of 123mph. Combined economy is 39.2mpg.

A six-speed gearbox is standard and BMW say the X3 has the advantage over competitors because of the xDrive four-wheel drive system. Introduced on the bigger X5 last autumn, xDriveuses a centrally mounted clutch to distribute power to the axle with the most traction. This is linked to Dynamic Stability Control that can reduce power and even brake individual wheels for better grip. Prices start at £26,175 - sadly the more powerful 3.0d X3 won't be available until the autumn of 2005.

Having come to the conclusion that the form-follows-function Multipla is never going to sell in its original form, Fiat has given it a major facelift. The Multipla now has a bland corporate front, rather than the weird swamp-monster visage it used to sport.

However the brilliant, if odd-looking, passenger compartment is unchanged, so the doors look a bit like they belong to a different car. In a way it is a shame that buyers were put off by the looks, because the original Multipla was a sort of Mr. Spock on wheels: looked strange, but was utterly logical once you got used to it.

The new range starts at £13,295 for the 1.6 Dynamic and ends with the 1.9 Eleganza at £16,495.

BMW has announced another set of excellent results. Second quarter sales were up by 20% and the BMW brand alone is now running at over 1 million sales per year, with Mini adding another 180,000. Profits were also up, at €1.2 billion, a profit margin of over 8% - excellent by the standards of the car industry.

Tellingly, after much talk of records being broken at both BMW and Mini, the only comment about Rolls-Royce is, "319 Rolls-Royce motor vehicles were handed over to customers during the first six months of 2004". Actually, that is not too terrible. Production is now running at about 800 a year, compared to a target of 1,000. The Phantom is unlikely ever to turn a profit, but it seems to be doing marginally better than the Maybach from Daimler-Chrysler.

  EU Mulls Scrapping Registration Tax

The European Commission is considering the abolition of the car registration tax and other fees which it believes distort the bloc's single market, a Commission spokesman says.

"The general gist of the proposal ... is that those taxes not environment-related, like the vehicle registration tax, should be transformed and replaced with road taxes and fuel taxes," Tilman Lueder told a news briefing on last week.

He said the EU executive would consult on the plan with governments, companies and other institutions until September 10 and then propose legislation. It would have to be approved in negotiations between governments and the European Parliament.

The registration tax and other fees vary across the 25-nation EU, resulting in different car costs and stifling free movement of goods - one of the bloc's principal rules. Lueder said that as an interim solution, before the registration tax is scrapped, the Commission would propose a system to refund the levy if an owner moves with his car to another EU country.

Separately, the Commission said it might launch a probe into the excise tax Poland levies on second-hand cars brought from abroad.