THE insurance industry has come under pressure to scrap the car theft surcharge following the revelation of a substantial drop in stolen cars in the first quarter, but any imminent changes have been ruled out. Consumer Council deputy chief executive Mr Li Ka-ming yesterday pledged to lobby insurance companies to scrap the surcharge if the police crackdown on car theft continues its success this year. Mr Li welcomed the latest police statistics which show that the number of cars stolen between January and March this year fell by 25 per cent from the last three months of 1992. The South China Morning Post yesterday revealed that 1,422 vehicles were reported missing in the first quarter, compared with 1,900 taken between October and December. ''This is excellent news for everybody associated with the motor vehicle industry,'' Mr Li said. ''If this is the start of a trend in which theft figures fall or stabilise, then I would think that there will be an overwhelming case for the industry to abandon the surcharge and reduce the costs of policies in general.'' The surcharge, levied on top of premiums, was introduced by the Accident Insurance Association in 1991 as a response to the increase in car theft. The rate was fixed at 0.25 per cent of the value of the vehicle insured but some insurance companies have increased it to up to one per cent. In the past three years, premiums have also increased by an average of 50 per cent, according to the association. Insurance officials explained to legislators in 1991 that the levy would be reduced or even abolished if the theft problem improved. Mr Li said: ''One of the main reasons given by the industry for the increasing costs of insurance was the rising numbers of stolen cars. ''The Consumer Council will meet the association later this year before they recommend rates for 1994 and if the situation is stable or improving, we will press very hard for a real reduction in the cost of insurance.'' Association manager Mr Choi Kem-shing said the association would not consider altering premiums or the anti-theft surcharge ''until there is clear evidence of a real improvement in the theft problem''. ''The first quarter figures are very encouraging but we need to see the statistics over a longer period than that before making any decision,'' he said. Mr Choi said although the number of cars stolen in the last quarter had fallen by 488 compared with the last quarter of 1992, it was possible the total value could be higher. ''If more high-value cars were stolen in the last quarter, the cost to the insurance industry could actually be higher this time.'' Police said no breakdown on the types of cars stolen was available yet. The association recommended an average of 10 per cent increase in premiums in January, a rise Mr Choi said was fair considering the record levels of car crime last year. ''We are in the process of carrying out our own quarterly survey of our members and will know more when they report back to us.'' Mr Choi added that 65 of the 80 insurance companies in Hongkong were members of the association, but individual companies could set their own rates and levies. ''We only recommend rates and have no power to make our suggestions compulsory.''