New cars still costing up to 60% more in UK

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The Independent Online

Britain is still the most expensive country in Europe for new cars, with some popular models costing 60 per cent more in the UK than on the Continent, according to an authoritative analysis released yesterday.

The survey by the European Commission showed that the UK was the dearest place to buy 52 of the 80 models examined by its competition officials.

Brussels last month announced changes to the rules governing the distribution and sale of new cars designed to make it easier for British consumers to buy from continental dealers. But publishing the latest price comparisons yesterday, Mario Monti, the European competition commissioner, said that he was continuing to receive complaints from UK car buyers who encounter obstacles when trying to purchase new models in other member states.

Mr Monti said many of the complaints related to long delivery times and high supplements charged by continental dealers for supplying right-hand drive models. Volkswagen, which also owns the Audi and Seat brands, was the worst offender.

The survey, conducted in November last year, found that a Fiat Seicento cost 62.5 per cent more in the UK than in the cheapest EU member state, Greece, and a Ford Focus, the biggest-selling car in Britain last year, cost 32 per cent more.

Even cars produced in the UK were significantly more expensive to buy here.

The Nissan Micra, which is built at the Japanese car-maker's plant near Sunderland, costs 40 per cent more than in the cheapest EU market and the Rover 25, built at MG Rover's Longbridge plant in Birmingham, is 35 per cent more expensive. A Ford Focus cost £2,000 more in Britain than in the Netherlands.

The comparisons are based on the pre-tax prices of new models calculated in euros. Car manufacturers say that when the UK's low rate of taxation on new cars and the high value of sterling against the euro are taken into account, on-the-road prices in Britain are similar to those on the Continent. But Mr Monti said this failed to explain why pre-tax prices in countries such as Finland, Denmark and Greece, where sales taxes are high, were often similar to those in countries such as Spain, which does not levy a heavy tax on the purchase of new cars.

The survey also found that despite the introduction of the single currency, there had been very little price convergence within the eurozone. Supporters of the euro argue that it will force manufacturers to harmonise prices by making them much more transparent. But the commission found that in some cases price differentials within the eurozone had widened, not narrowed, since the previous survey in May. Prices charged in Germany, the most expensive of the eurozone countries, were 20 per cent higher than the cheapest price available elsewhere for 40 of the 80 models surveyed.

The widest price differentials were found on cars produced by General Motors, which owns the Vauxhall, Opel and Saab brands, Fiat, which also owns Lancia and Alfa Romeo, PSA Group, which owns Peugeot and Citroen, and Volkswagen.

Price differences were narrowest on cars made by BMW, DaimlerChrysler, which owns Mercedes Benz, and Ford, which also owns Land Rover, Volvo and Jaguar.

Mr Monti said the monitoring exercise had confirmed that there was "significant room" for improvement in the price differentials charged in varying European markets.