Brussels, 01/08/2006 (Agence Europe) - The European Commission's latest report on car prices shows that the level of price convergence on car prices remained unchanged throughout the first half of 2006, both in the euro zone and in the EU as a whole, compared with March 2006 and August 2005. In most of the new Member States, car manufacturers seem to have adjusted their prices downwards, indicating that they have tried to attract consumers with lower budgets.
The report shows greater market convergence, particularly in the euro zone, with a dispersion indicator of 6.5% in the EU25 over the last 18 months and 4.4% in the euro zone over the last two years. Price differences remain, however, substantial between the cheapest Member State and the most expensive for some models: of the 698 prices mentioned in the report, 598 exceed the cheapest national market by 20% (compared with 568 out of 1722 in February 2006). Of the ten top selling models in the EU in 2005, the greatest difference in price in the euro zone was for the Ford Focus, which cost on average 30% more in Germany than in Finland, a difference of some €4000 (including VAT). The report shows that Finland remains the cheapest country in the euro zone in terms of pre-tax prices (more than a quarter of the 85 models of the report reach their euro-zone lows in Finland), followed by Greece. In the EU as a whole, Denmark remains the least expensive country with prices 5.9% lower than in Finland, followed by Hungary (5.5% lower than Finland); Germany remains the most expensive country in the euro zone for 31 of the 85 models, while in the EU25, the Czech Republic has become the most expensive country, with prices 7.3% higher than the EU average. In general terms, however, the new Member States still appear to be, on average, cheaper than “older” Member States.
This general price stability is counterbalanced, however, by a double tendency: price dispersion for small and medium cars has increased (typically 7.3%, compared with 7.1% in the preceding report), whereas prices for larger and luxury cars have further converged (typically 4.9%, compared with 5.7% previously). This tendency may be explained by manufacturers' price reductions on small cars to be more attractive to consumers, and a re-balancing of prices for the second group of cars, which are less in demand. (Information: http: //ec.europa.eu/comm/competition/car_sector/price_diffs)