Brussels, 25/07/2003 (Agence Europe) - The latest report by the European Commission comparing prices of cars in the different EU Member States shows that price differentials for new cars are still substantial, despite a timid move toward convergence. Denmark, Greece and the Netherlands have the lowest prices without taxes whereas, in the euro zone, Germany and the Netherlands have the highest.
The report is based on car prices on 1 May 2003 and compares retail prices before taxation of 91 best-selling models for 26 car manufacturers. Figures show that the price differences are less marked than in earlier years: the average price difference between the national markets has fallen from 10.6% to 8.6% compared to the study published one year earlier. Nonetheless, price differences from one State to the next sometimes remain considerable. Thus, for 8.5% of the models taken into account, the most costly Member State has prices 20% or more above those in the Member State with the lowest prices. The largest gap concerns Fiat Seicento whose price in Austria (EUR 7390) is 45.5% higher than that in Spain (EUR 5080). In absolute terms, a vehicle belonging to a category of car with average engine power, of the Peugeot 406 kind, costs 5000 euros less in Greece, the Member State where prices are the lowest, than in Germany, where prices are the highest. A Volkswagen Passat may, however, cost 4600 euros more in Germany than in Greece. This situation shows that consumers can make substantial savings by buying their vehicle in certain Member States. It also shows that competition between distributors established in the different Member States and the level of cross border buying is not yet a sufficient constraint on competitiveness to make manufacturers bring their prices into line. The survey also shows that, in Germany, 35 models are sold to consumers at the highest prices of the euro zone. Twenty-four of them are from 20-42% more expensive than the same models sold by the Member State of the euro zone which practices the lowest prices. Austria, to a lesser extent, follows this same trend. Given the depreciation of the pound sterling compared to the euro, the United Kingdom is no longer the most expensive market in the EU. However, prices indicated do not take into account costs linked to the installation of right hand drive, costs that are sometimes very costly and which vary from one model to the next. British and Irish consumers who buy a vehicle in another Member State will pay less for changes made to a Rover or Volvo (less 4%) and more (+/-10%) for models of the Volkswagen group (VW, Audi, Seat and Skoda). As far as price differences from one category to another are concerned, the report notes that price convergence for the best-selling models within different categories has not changed substantially since the last report was published. As six months earlier, the figures stress that price variations for small but relatively costly vehicles are close to those noted for the more powerful and more expensive models. For the first three categories (A to C), which represent the larger sales volumes and the largest number of models, the average price differences within the euro zone are thus close to the price differences noted in the highest price categories (D, E, F and G). Finally, as far as maker price policy is concerned, the survey shows that, for the whole of the euro zone, vehicles made by the PSA group (Peugeot, Citroën) and by Volkswagen (VW, Audit, Seat and Skoda) are those which show the largest price differences within the same make. On the other hand, manufacturers such as BMW, DaimlerChrysler (which includes Mercedes), General Motors (including Opel/Vauxhall and Saab) and to a lesser extent Renault, limit the price differences within the euro zone to 20% or less.
The survey thus stresses that a real single market for cars is still far from being created, a situation that should, however, begin to come about once the new rules on motor vehicle distribution have been implemented. The process will begin on 1 October 2003 with real liberalisation on 1 October 2005, when manufacturers will no longer be able to prevent the distributors from opening supplementary sales points where they wish, including in other Member States. Fully applied, the new rules should strengthen competition and integrate the still fragmented markets. They should also simplify crossborder purchasing, either directly by consumers or by an intermediary buying on their behalf. Commissioner Monti stresses that: "it is clear that the new rules on motor vehicle distribution have not yet reached their full potential, for one thing because we are still in the one-year transitional period". He nonetheless states he is convinced that the new rules will, in time, have a positive impact whose "'effects will not be limited to car prices but will also be felt as regards repairs and servicing"'.