Brussels, 25/02/2002 (Agence Europe) - The European Commission has published its new report on car prices in the EU, giving the situation on 1 November 2001. For the first time, almost all catalogue prices are listed in euros, thus giving the first indication of how prices are adjusting to single currency. Having made price comparisons within the 15 Member States for 80 best-selling models for 24 makers, the Commission notes that, despite the introduction of the euro and the prospect of the new Regulation on automobile distribution that is to reform the sector, prices have not become closer and there are still considerable differences from one country to the next. Commenting on the report, Commissioner Mario Monti considers that "market conditions can still be considerably improved in the automobile sector".
Having used, as a basis, retail prices net of tax as recommended by makers, the Commission noted that, in the euro zone and generally speaking: a) Germany, and to a lesser extent Austria, remain the most expensive markets. In Germany, 41 models are sold at the highest prices of the euro zone, of which 40 are 20% higher in price than those on at least one other market of the euro zone. In Austria, differences of over 20% were noted for 31 models; b) on the other hand, the least expensive markets are those in Spain, Greece and Finland. The report notes price differences below 20% for over 90% of the models covered by the inquiry; c) the average price differential is far greater in the first four segments (A-D). Price differences for vehicles ranging from "mini-cars" (A) to "family" models (D), where the high number of models should normally be the sign of strong competition, were far greater (that is, largely above 20%) than in the E, F and G segments ("large roadsters", luxury cars and four-wheel drive/monospace/sports vehicles); d) outside the euro zone, prices in the United Kingdom are higher than in the euro zone. In comparison with the last report (situation on 1 May 2001), prices have however fallen by over 5% for nine models, while, for seven other models, there are increases above 5%. The United Kingdom therefore remains the most expensive, over all, for 52 of the models examined.
Taking into account the most popular models, the Commission specifies that, if Germany and Austria are the most expensive markets for almost all A and C models, they are only the most expensive for half of the category D models and are only occasionally classed as the most expensive markets in the E and F segments. The study of manufacturers shows on one hand that, over the whole of the euro zone, General Motors (Opel-Vauxhall, Saab), Fiat (Fiat, Lancia, Alfa Romeo), PSA (Peugeot, Citroen) and Volkswagen (Audi, Seat, Volkswagen) are the groups for which price differentials are the greatest. Some of these also apply a high price strategy on the German market. On the other hand, some German manufacturers (mainly BMW and DaimlerChrysler) and, to a lesser extent, Ford (Ford, Volvo, Land Rover) generally limit price differentials in the euro zone to a maximum 15%. The Commission noted, moreover, that the lack of tax harmonisation generally pushes manufacturers to apply lower prices net of taxes in countries that apply particularly high taxes on automobiles. Thus, Finland, Denmark and Greece, which are characterised by a high level of taxation, practice particularly low prices net of taxes in order to make the prices with taxes included affordable. Nonetheless, this lack of harmonisation does not prevent prices net of taxes from sometimes being similar in States that practice a different taxation rate, as in Spain and Germany. This gives rise to prices with taxes all included that are sometimes very different. The Commission makes it clear that, in the United Kingdom, where prices net of taxes are high, the price of cars should include the additional cost due to British specifications (right-hand drive) and is affected by the value of the pound. This situation pushes British consumers to buy their cars with continental dealers and the Commission notes in this respect that there are still many obstacles to the purchase of a car in another Member State, obstacles, for example, that consist of supplements for right-hand drive being particularly high, and the length of delivery times.
The new draft Regulation, that the Commission is note expected to adopt before the summer, aims to put this situation right. Thus, Commissioner Monti said on the occasion of the report's publication: "the reform proposals presented by the Commission on 5 February 2002 should put the Internet Market into top gear, clearing the road for consumers to benefit from greater competition and increased choice, while reinforcing quality and safety in vehicle repair". The complete report is available for consultation at the following website: http: //europa.eu.int/comm/competition/car_sector.