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Tuesday, 29 February, 2000, 15:38 GMT
Driving down car prices
Cars on forecourt
Motorists are hoping for big savings
Considering the cost of buying a car, it is perhaps surprising that the campaign against UK prices has taken off only recently.

Of all the consumer inquiries currently under way, this is the one which could have most impact - not just in the big savings it could lead to, but the possible changes to the way cars are sold.

The Competition Commission handed its report to the Department of Trade & Industry in January; the results were to be made public later in the year.
Paying too much for your motor?
ALFA ROMEO 145 UK - 11,040 Denmark - 6,178

UK - 6,442
Greece - 3,979

UK - 10,183 Finland - 6,304

UK - 10,055
Spain - 6,283

UK - 6,913 Denmark - 4,071

Italy - 6,089

EC figures

The motor industry has always denied consumers were being ripped off.

However, various surveys have shown that prices in the UK are far higher than in other European countries.

The European Commission compiles figures twice a year. The November statistics show that UK buyers can pay up to twice as much as drivers in other EU countries.

A Subaru Legacy costing 14,342 in the UK before tax could be purchased in Denmark for 7,115.

And a Ford Mondeo costing 11,834 has a price tag in Denmark of 6,406.

"It's interesting that when we started campaigning on this, we found an article we had written 15 years ago and nothing had changed," said Phil Evans, senior policy adviser with the Consumers' Association, which has led the Rip-Off Britain campaign.
Ford on a forecourt
Buyers have been holding back until the report is published
Manufacturers are allowed to control the prices that dealers charge because of a long-standing block exemption from EU competition laws.

But even before the report has been published, they have been hit hard.

Consumers are holding off in the hope of cheaper prices in the near future - in January the number of private buyers was down by 10%.

That is despite more than half of all dealers offering prices in an attempt to shore up sales.

Import plan rejected

"It's something that we wanted and encouraged, but the degree to which consumers have said 'We have had enough' and are preapred to do something about it should send shock waves through other industries," said Phil Evans.

A group of the country's largest dealers did try to react to consumer demands by offering cheap European imports.

Car on forecourt
Dealers' plans to import from Europe fell through
But their trade body, the National Franchise Dealers Network, rejected calls for the import scheme.

And while the dealers wait to find out how their businesses will be affected, other car traders have been quick to offer an alternative.

Some forecourts are doing a thriving trade in European imports, offering savings of thousands of pounds.

Internet sites are also promoting their services, sourcing most of their cars from overseas to offer the cheapest prices.

The way people buy their cars has changed over a short period of time, and they are learning that shopping around can produce big savings.

Benchmark inquiry

Whatever the outcome of the car pricing Commission report, franchised dealers are certain to find themselves in a much more competitive market.

"You are dealing with an enormous, politically powerful industry and if it can be faced down in the name of consumers then every industry will have to think about what it does," contends Phil Evans.

He expresses some sympathy for the dealers, who are tied agents of the manufacturers and to some extent caught in the crossfire.

But as the first high-profile sector to be examined under the full glare of the "rip-off Britain" spotlight, the motor industry's fate could set a vital benchmark for future consumer inquiries.

See also:

07 Jan 00 | Business
05 Jan 00 | Business
09 Jul 99 | The Company File
09 Jul 99 | The Economy
18 Mar 99 | Your Money
08 Dec 98 | The Economy
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