Because if we levy taxes on cars imported from abroad, you get what is called a trade war where they will then tax things they get from us.
For example. If we taxed every car coming in from France they would tax... what is it they buy from us again anyway?
Or if we taxed all the cars coming in from Spain they would tax us on all the fish we export there. Hang on, nope, they just fish our waters anyway.
We do have plenty of exports, fuel, chemicals, food (British beef is popular again I believe, they probably even eat it in France), also drinks and believe it or not, tobacco products. However, the vast majority of our GDP is now based on services: IT, banking, research. Not sure how that is taxed but I am pretty sure that various governments would find a way.
However, despite being a blatant Tory I believe re-nationalisation of a few industries would help... not sure if the motor industry would be one of them, but certainly give them some economic advantages.
I know that some people slate Rover MG and their cars, generally they are people who drive rubbish cars anyway (and have probably never driven a Rover!). But, if we did what Slogger said, and heavily taxed foreign cars, then people would think "Hmmm, shall I pay £15K for a 1.2 litre base model Euro minibox, or £10K for a similarly equipped and far superior MG ZR?" Rover sales would increase, they would have more money to spend on R&D and then the quality and variety of the cars would come up again. Exports would increase, the world would be done a favour.
It is interesting for me: during my frequent jaunts across the channel when growing up, 95% of French people seemed to be driving Renaults, Citroens and Peugeots. I always thought they looked like funny cars. Like the suspension somehow didn't work right, and the wheels always pointed funny when they were manoeuvring (just look at a 2CV). But now when I go there, I don't notice a great majority of French cars. Maybe they are becoming less conservative, or perhaps it's cos now they don't need yellow headlights they can buy what they like.