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Average new car price in Europe sees first rise since 2000

The year-on-year average European new car price has risen for the first time since 2000, whilst UK prices have also seen a sharp rise of 5.4 % over the last 12 months, according to the PricewaterhouseCoopers and Index of New Car Prices.

The index shows that average retail new car prices in the UK last month were 4% higher than the average for western Europe and 6% higher than the average for the euro currency zone as a whole.

The strongest movement in retail car prices was in Denmark where prices rose by 7.9% during the 12 months to June. The weakest price movement was in Hungary where retail prices decreased by 1.8%.

Generally across Europe, the average retail car price rise for the twelve months to June 30, 2004 was greater than the year-on-year rise to June 2003, as car prices on the whole rise more quickly.

The average pre-tax price of cars in the UK (converted to euros) rose 3.1% in the 12 months to June. Pre-tax prices in the UK are 9% higher than the average for western Europe and 11% higher than the average for the euro currency zone. Pre-tax car prices in the whole of western Europe rose by 1.9% in the year to June.

Shaun Pitt, automotive partner, PricewaterhouseCoopers says: “There is increasing evidence that pre-tax car prices are harmonising within the eurozone. However, vastly differing national tax regimes continue to inhibit convergence of tax-included retail prices. Outside euroland, exchange rate movements prevent any possibility of price harmonisation at either pre- or post-tax levels.”

The lower medium segment of the market showed the largest increase in average pre-tax prices in Western Europe during the 12 months to June: 9.6%. The weakest segment was the Sport Coupe segment, where prices rose by 1.7%.

Average price movements in the main volume segments were:

Small - 4%
Lower medium - 9.6%
Upper medium - 5.1%
Executive - 8.4%

Robin Goodyer, operations director of, says: “The increase in manufacturers' pre-tax prices last month was the largest since began monitoring prices in 1998.

"Three factors are fuelling the price rise: higher sales of more expensive multi passenger vehicles (MPVs) and Sport Utility Vehicles (SUVs); pricier new models in the volume segments and the carmakers' need to compensate for falling revenue while the German and French car markets continue to decline.”

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