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Carmakers deny new 'rip-off' claims

Moves by carmakers to buy up urban dealerships have been criticised by the Consumers' Association as anti-competitive and likely to push up new car prices. Mercedes-Benz has been at the forefront of the trend with plans to own all its retail outlets in London, Manchester and Birmingham.

But other manufacturers are buying city centre sites in the run-up to the block exemption changes. The worry for consumer groups and those who oppose manufacturer control over dealers is that car buyers will not be able to 'shop around' for competitive quotes.

If one organisation owns all the motor retail outlets in a large city, then they'll be able to control prices, say opponents. “These manufacturers are being anti-competitive,” Consumers' Association spokeswoman Emma Harrison told AM. “Mercedes knows changes to block exemption are on their way, and it has to buy up dealers to keep control of its network and to make more money.”

Mercedes strongly denies the rip-off accusations. “We led the way with price reductions in 2000 - customers are getting better value with our cars now than they were years ago,” says a spokesman. “For example, the entry-level C-class is now £19,995, while it was £19,990 five years ago, and the current car offers higher standard specification and a better warranty.”

In the mid 1990s, Fiat appointed Pendragon to run all eight of its franchises in and around London. The experiment failed after a few years.

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