However, it believes that car prices are still unjustifiably high in Britain compared with other countries in the European Community.
The official start of the single European market on 1 January 1993 has not liberated the distribution of cars as it has other products, because of the 'selective distribution' system, whereby car dealers are tied to specific manufacturers.
Last month Sir Leon Brittan, the European Commissioner with responsibility for the single market, criticised car makers for the absence of 'transparency' on pricing, which hinders comparison. The plethora of models, slightly differing specifications and localised discounting make price comparisons very difficult within one country, let alone a confederation. The Commission has instructed manufacturers to publish its prices in each EC state, however, which should ease comparisons, a move which manufacturers have been resisting.
Research by consumer groups shows that Britain is consistently the highest priced market, with Belgium the lowest. Price differentials can be as great as 30 to 40 per cent.
The recent devaluation of the pound has lessened the price gap, but it has also led to the Ford price increase.
In theory it should be possible to buy any model, including right-hand drive versions, from any EC country. But in practice, dealers are often worried about upsetting manufacturers and are reluctant to sell right- hand drive models.
Buyers should remember that British VAT, at 17.5 per cent, is higher than that in some countries and that the difference is payable on imports.Reuse content