EU car price difference narrowed in 2010: commission

The price difference of new cars between European Union states narrowed last year thanks to increasing competition in the 27-nation bloc, the European Commission said on Tuesday.

The real-term price of new cars adjusted for inflation fell in 24 of 27 EU states for a total drop of 2.5 percent, the commission said in an annual report.

The downward trend of car prices appeared "particularly accentuated" last year by the end of "cash-for-clunkers" programmes that several nations had launched during the global recession, the commission said.

"It is good to see that consumers in Europe are benefiting from competition in the markets for new car sales and continue to enjoy significantly falling prices in real terms," said European competition commissioner Joaquin Almunia.

"The fact that price differentials between member states narrowed further is a positive indicator of cross-border competition," he added.

The sharpest drops in prices were recorded in eastern Europe, falling by as much as 17.4 percent in Slovakia, 13.5 percent in Bulgaria and 11.6 percent in Slovenia.

Among the EU's larger nations they fell by 3.7 percent in Britain, 1.9 percent in Germany and 0.9 percent in France.

The price gap remains wide between the cheapest and most expensive EU states for some car models: a 44 percent difference for the Fiat Grande Punto/Punto to 24.4 percent for the Volkswagen Golf and 8.7 percent for the BMW 320D.

"I am also delighted to see that for the first time in a decade, real EU-wide prices for repair and maintenance services stopped increasing, a sign that the sector has understood the new rules of the game," he said.

New EU rules took effect in June 2010 to reform the after-sales market in a bid to curb practices such as the misuse of warranties by manufacturers.