Car dealers have dropped a plan to import cheaper cars from Europe to sell to private buyers.

Fears that it would upset manufacturers and cost the dealers their franchise have made them think again.

The plan highlights the difficult position dealers are in as a result of the current consumer backlash against high UK car prices.

The Competition Commission is to finalise its inquiry into the UK car industry soon, and its report is widely expected to call for price cuts.

Expectations that prices will fall have encouraged many consumers to wait before buying a car.

This reluctance to buy cars is reflected in recent car sales figures.

Last year 2,197,615 new cars were bought in the UK, about 49,000 less than in 1998.

The December 1999 sales showed a particular drop - 12.2% down on the total for December 1998.

Some manufacturers, such as Mitsubishi, have cut prices, but most have not, placing dealers in a tricky position.

Buying cars from Europe

They claim that manufacturers pocket most of the profit, with dealers currently having margins of about 5%.

Alan Pulham, of the National Franchised Dealers Association (NFDA), said the import plan illustrated "the extremes to which some dealers will feel obliged to go to overcome their dwindling profits".

He added: "While manufacturers have addressed the issue in a variety of ways, the consumer is still left confused over the price issue, which puts dealers in a difficult position."

NFDA president Sue Brownson said the plan was one of about eight or nine schemes suggested: "We decided it was not the right way to proceed."

The Consumer's Association claims that UK car prices are 40% more expensive than in Europe.

The consumer watchdog has been one of the fiercest critics of alleged price fixing in the UK by manufacturers and dealers.

Vauxhall's online sales

It has offered to help people import cars from Europe. It offers to help with the paperwork as well as advising them on dealers they have already checked out.

There are a number of other e-businesses which offer to locate, buy and deliver cheaper cars from continental Europe to UK customers.

Dealers have also come under threat from the launch by manufacturers - led by Vauxhall - of direct selling to customers via the internet.