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EC issues warning to manufacturers over pricing policies

The European Commission has issued a warning to manufacturers about restrictive selling techniques after finding new car prices in the UK are still higher than in the rest of Europe, despite reduced list prices and a fall in the value of the pound.

In the six months to the end of last November the EC found that the UK remains the most expensive market for almost all models looked at, despite manufacturer price cuts. Finland, Spain, the Netherlands and Denmark remain the cheapest markets.

The EC survey found that price levels in the UK remained high, despite the slight depreciation of the pound and the fact that prices in euros for 23 models sold in the UK have diminished by more than 10%. An EC statement says: “As the prices in the UK are still much higher than elsewhere, many British consumers continue to buy their cars from Continental dealers. The commission still receives many complaints from British consumers who encounter obstacles when purchasing a car in another member state.

“Many of these complaints relate to high righthand drive supplements and long delivery times. Competition Commissioner Mario Monti has reaffirmed his commitment to investigate restrictive practices by car manufacturers that impede EU citizens.”

Manufacturers behaviour, the EC says, will be taken into account when Mr Monti presents his proposals on the future of Block Exemption in 2002.

The Society of Motor Manufacturers and Traders asserts that the differentials are so noticeable because the EC compares pre-tax prices.

The SMMT said: “The latest EU car pricing survey once again shows that varying taxation systems throughout Europe is a primary cause of new car price differences.

“The EC findings mirror those of the recent Credit Suisse report which concluded that 'whilst the average man in the street may see the manufacturers as guilty of exploiting the consumer, the real key to harmonising prices could prove to be fiscal changes that would make it much easier for manufacturers to address this highly complex issue.'”

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