Brussels, 02/03/2004 (Agence Europe) - The European Commission has published its latest report into car prices in the EU15. According to this report, price convergence seems to be continuing, but at the same time, there are considerable gaps between certain countries and for certain models. As for previous studies, the report is based on statistics sent in by 18 European and 8 Japanese manufacturers, with the retail prices (before tax) they recommended on 1 November 2003 for the 91 models representing their biggest sales. Whilst acknowledging that prices have still not levelled out entirely, Commissioner Monti sees in this "signs of more integrated markets, especially in the euro area".
The report states, first and foremost, that there is relative price stability throughout the EU: between November 2002 and November 2003, the vehicle price index rose 1.3%, compared to 2% for inflation. As for markets characterised by high sales volumes, the lowest increase was registered in Italy (+0.5%) and the United Kingdom (+0.5% in pounds sterling). Greater increases were noted in the Netherlands (+3%) and France (+2.4%). Nor did price convergence materially harm consumers in the Member States with the lowest pre-tax prices, except Denmark, where car prices have increased considerably compared to prices for other products (+3.3%). This country has the lowest pre-tax prices in the EU, 6% lower than Greece, the cheapest country of the euro zone. Prices have fallen in Greece (-0.6%) and especially in Finland (-5.6%), which recently changed the corresponding tax regime. Denmark, Greece and Finland registered the lowest pre-tax prices, whereas Germany, and, to a lesser extent, Austria, remain the most expensive markets in the euro zone.
In Germany, 38 models are sold at the highest prices in the euro zone, and 23 of those are between 20 and 39% higher than the same models sold on the national market of the euro zone with the lowest prices within the zone. In Austria, 9 models are sold at prices over 20% higher than the lower prices in the euro zone. The number of examples of such marked price differences thus remains virtually unchanged from the previous study, which pointed to 24 models for Germany and 11 for Austria. The report also reveals that price differences are lower than those registered in previous studies. The average gap between the different national markets has fallen from 7% to 5.6% compared to the previous study. The difference in price between the cheapest Member State and the one with the highest prices, however, remains considerable. The largest gap concerns the model Volkswagen Passat, which costs 39% more in Germany than in Greece. In absolute terms, the German consumer buying a Passat in Greece will pay 5,700 EUR less, including VAT, than on the German market. It is also worthy of note that in Greece, almost one model in three is sold at the lowest price in the euro zone. As for price gaps between one category and another- small segments (categories A and B), medium segments (category C) and large segments (categories D, E and F)- no major change was noted. The report still shows that price variations for small vehicles (A to C) are closer than those observed for more powerful and more expensive ones (D to F). Multiple-use and sports vehicles (category G) show the most uniform prices. As for price policies practised by the manufacturer, Skoda and Volkswagen (VW Group), Peugeot (PSA) and Fiat show the greatest differences within the marque. However, certain brands such as Mercedes (DaimlerChrysler Group), BMW, Audi and Seat (which belong to the VW Group) limit price gaps within the euro zone.
In conclusion, the Commission believes that genuine competition, with more homogenous price reductions, will only be seen with the total and unconditional removal of the localisation clause scheduled for 2005, which will mark the full application of the new exemption by category for automotive distribution. As of this period, dealers will be able to establish branches and points of sale abroad, and practice lower prices than on the national market where they establish themselves. Consumers will therefore no longer have to travel to find the Member State with the most interesting prices, but will be able to benefit from lower prices from foreign dealers established in their country of residence.
The report is available on the website of DG Competition, at the following address; http: //europa.eu.int/comm/competition/car_sector .