Fleet News

Fleet pressure keeps UK upper medium car prices in check

FIERCE competition for fleet business has kept UK list prices of typical company cars much closer in line with European pricing than in the small car segment. Research carried out by accountant KPMG on behalf of a BBC Panorama programme has revealed lower price differentials between the UK and Europe for larger cars.

High new car prices in the UK have fuelled stormy political and industry debate, with motor manufacturers blaming the strength of Sterling, and consumer organisations attacking what they see as profiteering by car makers exploiting the right-hand-drive market and blocking British motorists' attempts to buy cars on mainland Europe. KPMG's research found British drivers were paying on average 6.6% more for cars than their European counterparts, and that over the last four years buyers have paid between 5.2% and 9.8% more for small to medium-sized cars, even taking into account currency fluctuations and the higher specification of UK models.

Panorama used these figures to accuse car makers of price fixing and exploiting the right-hand-drive UK market to charge up to £1,000 more for a car, allegations strongly contested by the three manufacturers in the programme's firing line - Mercedes-Benz, Volkswagen and Volvo. They insisted that far from threatening franchises which offered discounts to customers, dealers were free to sell cars at whatever price they chose. But they added that strong demand for their product meant there was no need to discount.

Panorama's claims have, however, received the attention of Consumer Affairs Minister Nigel Griffiths, who has demanded that the European Commission should investigate why British buyers, pay more for their cars.

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