MEPs vote to delay car market liberalisation

The European Parliament yesterday dealt a blow to hopes of cheaper cars by calling for a two-year delay in the implementation of new rules designed to liberalise the EU car market.

Under pressure from German manufacturers in particular, MEPs voted 325 to 120 to postpone key changes to the so-called block exemption until 2005 at the earliest.

The changes, which are due to come into force at the start of next year, would prevent manufacturers dictating which dealers were allowed to sell their cars and where. But the parliament recommended that the lifting of the ban on dealers selling cars outside their territories should stay in place.

The European Competition Commissioner Mario Monti, who has pioneered the changes to the regime, is under no obligation to comply with the parliament's vote, which is non-binding.

The UK group of MEPs in the parliament voted against a delay. "Consumers have been ripped off for far too long. The European Commission should press on with their reform plans without further delay," said British Conservative Theresa Villiers. UK pre-tax car prices are the highest in Europe.

Phil Evans, the principal policy adviser for the Consumers' Association, said a vote to delay was really a vote to block reform and urged Mr Monti to press ahead.

But the Society of Motor Manufacturers and Traders said: "The elected representatives of Europe have considered this and reached a view and Commissioner Monti should take note."