Car pricing study labelled ‘unfair’ by manufacturers

Date: 26/07/01

CAR manufacturers have reacted angrily to a European Commission report showing that there are still gaping differences between prices in different EU countries. The study unveiled this week comes as competition chief Mario Monti considers options for reforming the special legal regime which allows carmakers to maintain exclusive dealer networks. But firms seeking a renewal of their 'block exemption' from EU competition rules say the report's emphasis on pre-tax prices is misleading and that its presentation is biased.

According to its findings, the most expensive market for vehicles in the eurozone is Germany, where at least half the available models are at least 20% more expensive than elsewhere. UK prices remain the highest in the 15-nation bloc. Internet car-sellers, who want to see the block exemption lifted to allow them to purchase direct from manufacturers, seized on the new figures. "They confirm that action is needed," said Justin Skinner of JamJar.com.

Monti, who has received a preliminary study by consultants Arthur Andersen outlining legislative options for reforming the block exemption, faces calls to end manufacturers' rights to restrict the number of dealerships they sell to, as well as the obligation to provide servicing. Price gaps have even widened in some cases - including the Volkswagen Golf, where the difference is up 3% to 33.1% since last year. But VW spokesman Kurt Rippholz condemned the study's approach. "It's very unfair," he said. "The prices they've published are not the prices the consumer pays." Daimler Chrysler spokesman Hanns Glatz said differences between tax regimes accounted for half of the price variations in the market. "And the other half is equivalent to [the price variations for] a number of other products," he said. Monti hinted that the report's findings could toughen his stance ahead of September's review. "Manufacturers' behaviour will be fully taken into account," he said.

Car manufacturers have reacted angrily to a European Commission report showing that there are still gaping differences between prices in different EU countries.