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The BBC's Greg Wood
"Today car makers and traders were guarded in their reaction"
 real 28k

Sheila McKechnie, Consumers' Association
"The car manufacturers have treated UK customers with contempt"
 real 28k

Tuesday, 28 March, 2000, 18:47 GMT 19:47 UK
Car prices 'to be slashed'
New cars in a salesroom
'Car supermarkets' may be set up selling different vehicle makes
Ministers are set to order car manufacturers to slash prices by up to a third.

Within the next few weeks, the government is due to publish a report by the Competition Commission into the state of the UK new car market.

It is expected to recommend private customers get treated to the sort of discounts usually available only to corporate buyers.

The BBC's Business Correspondent Greg Wood says the government is expected to act on the report by compelling manufacturers to cut prices by up to a third.

UK prices higher

The Daily Telegraph says Trade and Industry Secretary Stephen Byers also wants an end to exclusive arrangements between manufacturers and dealers, which would allow "car supermarkets" to trade in different makes of vehicle.

But the Department of Trade and Industry has dismissed the reports of drastic price cuts as "speculation".

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

Cost comparisons
ALFA ROMEO 145 UK - 11,040 Denmark - 6,178

UK - 6,442
Greece - 3,979

UK - 10,183 Finland - 6,304

EC figures

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

European Commission statistics show that UK buyers can pay up to twice as much as drivers in other EU countries.

The newspaper says the Competition Commission has raised concerns about Britain's block exemption from European competition laws which allows the franchised dealership system to operate.

Mr Byers is said to be considering unilateral withdrawal from the block exemption, but he may instead put pressure on Brussels to change the rules to insist that manufacturers allow dealers to sell more than one make of car.

The DTI received the commission's report in January and Mr Byers is said to be still considering its findings.

New website

A spokeswoman for the department said there was no comment available other than to say the newspaper claims were "speculation".

The Consumers' Association, angered by the attitude of UK car retailers, has reacted by launching a new website this week aimed at allowing British buyers to sidestep car dealers.

The Carbusters site is to begin selling cars imported from the continent as part of its Great British Car Rip-Off campaign aimed at spotlighting high prices in the UK.

The organisation, which publishes the Which? magazine series, will offer vehicles at discounted prices on the site to customers prepared to wait around three months for delivery.

One couple claimed they had saved 6,500 when they bought two cars using the new website.

But the thrifty attitudes of UK consumers have been partially blamed by BMW bosses for the collapse of Rover.

BMW said the "hesitant and reluctant" buying attitudes of British consumers had badly dented Rover sales.

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