The Government is on the verge of forcing carmakers to slash prices by up to 35% by giving consumers fleet-type discounts, according to a report in the Daily Telegraph.

It claims that Trade and Industry Secretary Stephen Byers has accepted the Competition Commission's most damning conclusions, which would lead to “sweeping reforms”.

The inquiry report, expected to be published within the next two weeks, is believed to accuse manufacturers of operating a complex monopoly. It is said to recommend the end of the exclusive franchised dealer system, opening the way for multifranchised superstores.

BMW has reopened talks about investing in a car plant in Hungary, said the country's economic minister Gyorgy Matolcsy. Local reports claimed BMW was considering building small and medium sized cars.

UK dealers face renewed pressure from the Consumers' Association after its Carbusters.com import scheme went live this week.