Official: Cars cost 50 per cent more in Britain

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The Independent Online
BRITISH CONSUMERS are paying up to 50 per cent more for popular makes of car than their European counterparts, according to an official EU survey.

The research showed the UK is the most expensive place to buy 57 of the 76 best-selling models - including some Rovers - although the differentials have decreased since last year, when a Commission study showed that 60 of 74 cars cost more in Britain.

An EU statement on the motor trade, published yesterday, concedes that price differentials have narrowed because of currency movements and efforts on the part of manufacturers. But it adds: "There are indications that many car producers increased prices in so-called cheap markets rather than reducing prices in expensive markets. In such cases, the benefits to consumers seem at least questionable."

A spokesman added: "Some moves have started in the UK to cut prices. This is a good development to take away some of the windfalls. These are measures in the right direction but prices in high-price markets should be cut."

The Commission's survey is based on data given by producers, although actual retail prices often differ from recommended list prices. Nevertheless, it outlines dramatic differences throughout the EU, with the UK consistently at or near the top of the price league.

For example, a Rover 214 bought in the UK costs more than half as much again as the same model purchased in France; an Alfa Romeo 145 costs 45 per cent more than the same car bought in Spain.

At the other end of the scale, the cheapest car prices in the EU are generally in Portugal, Spain, the Netherlands and Sweden. In only one case - the BMW 735i - was Britain the cheapest marketplace. That makes it "attractive for consumers - and in particular UK residents - to buy a car abroad", the Commission says.

Yesterday the Society of Motor Manufacturers and Traders argued that the discrepancies were based on the high value of the pound.

Because of the length of time it takes to develop and produce cars, manufacturers have to budget in advance and are therefore vulnerable to exchange-rate movements, the society says.

A spokesman for the organisation added: "Currency differentials explain the difference in price. "We have seen the gap has narrowed; what we need to see is the pound weakening still further to achieve parity".

But a European Commission official blamed pricing strategies too, and argued that manufacturers' "windfalls" from beneficial currency movements were not being passed on to consumers. Consumers' rights campaigners argue that the British market is particularly vulnerable to high pricing because UK motorists need right-hand drive cars, which are not freely available in the rest of the EU. Brussels has sought to put pressure on manufacturers to supply right-hand drive cars on demand. The Commission, which says it has received many complaints from Britain, has no firm figures on the number of cross-border transactions.

Questioned yesterday, an official quoted estimates of 200,000 to 250,000 purchases a year, only 10,000 of which were from private buyers. The advent of the euro, which should make comparisons easier in the 11 participating member-states, is expected to increase these figures.