Volvo has been accused by a consumer report of unfair sales tactics to keep the price of new cars artificially high.

But Volvo has hit back, denying it fixes prices in breach of European law.

In the survey for Which? magazine, 12 Volvo dealers were contacted by an undercover researcher who said she was looking for a deal on a new car.

Volvo's Roger Ormisher: It's illegal and we don't do it

Ten of the dealers refused to offer a discount and two said they would be in trouble with the manufacturer if they cut prices.

The magazine accuses Volvo of apparent price-fixing in contravention of European regulations which say dealers must be free to sell cars at whatever discount they wish. The law also forbids manufacturers from applying pressure to sell a car at its full list price.

But Roger Ormisher of Volvo UK said: "We do not have a policy whatsoever of advising our dealers on discounts or not discounting.

"That is against European and national legislation and obviously we wouldn't be involved in that sort of price-fixing."

Andrew McIlwrith: Consumers are getting a raw deal

Which? says Volvo is not alone in restricting opportunities for bargain-hunters in the UK.

The report also accuses five other manufacturers of deliberately making it difficult for consumers to buy cars abroad, where prices are lower.

"We believe customers are getting a raw deal, certainly from some manufacturers. Car prices in the UK are high compared with the rest of Europe," says Andrew McIlwraith from Which?

"There is some belief that manufacturers are not allowing their dealers a free hand to get business as they wish.

"On the other hand consumers who want to put some effort into buying a car abroad, possibly saving thousands of pounds on a new car, are being stopped simply because dealers abroad are being uncooperative - and that seems to come from the top."

Which? contacted 17 Dutch dealers. Some said manufacturers would not allow overseas sales and only one was willing to supply a right-hand drive car.

But the Consumers' Association says under European law they are not allowed to do that and it plans to take its findings to the European Commission.

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