Don't buy it, car buyers

A consumer strike could force lower prices of private EU imports. By Paul Slade

A LEADING UK car importer wants British buyers to stage a consumer strike until European manufacturers' obey EU single-market rules.

Broadspeed Engineering helps UK buyers import popular right-hand drive models from countries such as Belgium, Holland, and Germany, where prices before tax are far lower than in the UK. Even after paying to import the car and adding UK VAT, savings of 20 per cent are often possible.

But Simon Empson, managing director of Broadspeed, says even bigger savings could be made. Manufacturers in countries where the most popular cars are cheapest effectively block import sales to protect their UK profits, he claims.

"The cars that most people want to import are those in the pounds 15,000 to pounds 30,000 group," says Mr Empson. "If you take that as the range then the best markets to import from are Denmark and Finland.

"But it is impossible in Finland and, to all intents and purposes, impossible in Denmark, because they quote you, typically, one-year delivery and massive deposits. Often, dealers won't even talk to you. That puts a buyer off very quickly."

Mr Empson believes the only way to force offending manufacturers into changing their ways is for UK buyers to refuse to buy new cars here until price differentials between the UK and the rest of the EU are reduced.

He says: "The European Commission is expecting the market to bring the price differentials down. The only way that is going to work is if people go on a buyers' strike and the manufacturers take fright."

A Consumers' Association (CA) campaign on UK car prices, launched on 30 June, uncovered a similar picture. Netherlands dealers representing Ford, Opel and Renault told the CA's researchers they could not provide a right-hand drive car for import to the UK.

A Ford dealer claimed: "We cannot order a right-hand drive car." An Opel dealer said he was "not allowed" to sell cars to British buyers and a Renault dealer said such sales were "not possible". A Mercedes dealer did not rule out the possibility, but said right-hand- drive deliveries "can take more than a year".

Philip Evans, senior policy researcher at the CA, says: "There should be no barriers placed in the way of individual consumers carrying out such activities. Unfortunately, we found the opposite was the case in most instances."

The CA says British buyers pay the highest prices for 60 of the EU's 74 best-selling cars. In most cases, the premium is 30 to 40 per cent. In January last year, the European Commission fined Volkswagen a record 102m Ecu (about pounds 67m) for discouraging its dealers in Northern Italy from selling to Austrian customers. That case is the subject of an appeal.

The commission has since opened similar proceedings against Daimler-Chrysler for its activities in Portugal, Spain, the Netherlands and Belgium and against Opel for its work in the Netherlands.

Stefan Rating, a European Commission spokesman, says: "Under our rules, what the Commission can intervene against is the manufacturers' systematic efforts to prevent dealers from selling to any individual they like."

The Competition Commission, known until recently as the Monopolies and Mergers Commission, is investigating the UK car market, and its findings are expected by 16 December.

The issues being investigated include "whether both recommended retail prices and actual transaction prices are persistently higher in the UK than in other member states and, if so, why?".

The Competition Commission is holding a public hearing on UK car prices at the Institute of Electrical Engineers, London WC2, on 20 July.

Broadspeed (0181-387 9121)