150,000 car jobs at risk in Europe, study says

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UP TO 150,000 car jobs could be at risk as European motor manufacturers cut costs to make themselves more price-competitive with Japanese producers, according to a study published yesterday.

European car prices are 33 to 45 per cent higher than in Japan but are likely to be forced down as Japanese manufacturers increase their share of sales in Europe, the report by Ludvigsen Associates, the automotive research group, and Euromotor says.

In order to maintain their market share, Europe's big car makers will be forced to match Japanese efficiency levels. 'The conclusion is that European car plants employ close to 150,000 more assembly workers than they would if average Japanese standards were maintained,' Euromotor says. This is equivalent to a sixth of the total European motor industry's workforce.

The report forecasts that price competition from Japan will build up slowly, beginning with medium-sized models built at the British assembly plants of Nissan, Toyota and Honda.

Initially, the Japanese will compete on price in the protected markets of France, Spain and Italy.

But as import restrictions are loosened and finally abolished in 2000 and transplant production increases, price competition will intensify, becoming fiercest in the small-car sector of the market.

By 1999, Euromotor estimates, the Japanese will be producing more than 1 million cars a year in Europe and command 15.3 per cent of the market.

The study also provides fresh evidence of the wide range of prices within Europe, with cars bought in Britain among the most expensive.

According to Euromotor, prices net of taxes are up to 35 per cent lower in Denmark than in Britain, 20 per cent lower in Belgium and 11 per cent lower in Germany.

The report also claims that list prices quoted to private buyers on the Continent are less than the price at which British dealers buy cars direct from the factory.

This, it says, justifies an investigation by the European Commission's competition directorate into wholesale as well as retail pricing.

Euromotor says, for instance, that the retail price of a three-door Opel Corsa 1.2 City is 8,633 ecus in Britain but only 5,483 ecus in Portugal while a Peugeot 405 GL 1.6 is more than 3,000 ecus cheaper in Belgium than in Britain.

The report is likely to spark a fresh row over UK car prices, which consumer groups have consistently argued are substantially higher than those on the Continent.

Euromotor's conclusions vary from those of the Monopolies and Mergers Commission, which largely cleared car makers of charging excessive prices in Britain in a report published earlier this year.

The Ludvigsen Car Price Report and Forecast, Euromotor Reports. UK price: pounds 2,450.

(Photograph omitted)