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European pre-tax car prices fall 0.5%; list prices rise 4.1%

Currency movements were mainly responsible for a fall of 0.5% in average pre-tax car prices in Western Europe during the year to August 2003, according to the latest eurocarprice.com index report. This is a further increase in the downward trend, which was 0.1% in the year to July. The average pre-tax price of a car in the euro currency zone increased by 3.7% over the 12 months, when manufacturer's price changes (2.0%) were adjusted for changes in specification and market volume mix. In the non-euro markets retail prices are 11.5% lower than 12 months ago because of the weakness of local currencies against the euro.

Pre-tax prices in Denmark fell from 92 to 86 in the Index, bringing Denmark level with Greece at the foot of the base price Index.

Among the euro currency countries, the largest increases in adjusted pre-tax prices compared to 12 months ago again occurred in Spain (3.3%), Belgium (2.7%) and The Netherlands (2.7%). Pre-tax rises in Germany again increased slightly, rising 1.0% over the last 12 months. The next lowest annual rate of increase among the euro countries was in Greece (1.8%). German prices are currently 7% above the European average, with Sweden, Italy and France very close to the average. Among the euro currency countries, Greece has the lowest average prices, at 14% below average. Next lowest is Portugal, where prices are 7% below average.

Eurocarprice.com says retail car prices after tax in the euro zone have increased by an average of 4.1% over the past 12 months, a slight weakening of the trend compared to the August figure of 4.4%. Poland, Denmark, Ireland, Austria and the Netherlands have seen annual increases of more than 6% in local retail prices.

The smallest annual increases are in Germany (1.8%) and Switzerland (1.7%). Prices in Finland fell by 4.6%. Outside the euro zone, Poland has seen prices increase by 10% and Denmark by 9.7%.

Eurocarprice.com reports there are no signs of prices within the euro zone converging. In fact, retail prices in most euro countries are further from the average today than they were in 1998.

There are some clear regional patterns in retail prices across Europe. Prices are generally high in the Scandinavian countries due to higher-than-average taxation levels. Denmark has the highest overall retail prices at 95% above the euro country average.

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