'The committee can only name and shame,' he said. 'Companies will not cut a penny off prices until forced by the Government, and they will continue to overcharge customers until then.' O'Neill rued the fact that the director general of fair trading will have to wait until March 1, 2000 before he gains the power to impose penalties of up to 10% of a company's UK turnover, and he dismissed as a 'tissue of lies' the car companies' explanations for why UK car prices are higher than on the continent, backing the CA's call for an end to the Block Exemption.
Sheila McKechnie, director of the CA, said: 'Consumers are sick and tired of being taken for a ride by the car industry. The industry's feeble excuses are a deliberate smokescreen to hide a £6 billion a year rip-off.' She highlighted European Commission evidence that shows a UK-built Rover 414 costs £11,379 in the UK and £7,951 in Portugal, a Ford Focus costs £10,157 in the UK and £7,340 in Portugal, and a Fiat Brava costs £10,557 here, but just £6,728 in Holland.
In a point-by-point rebuttal of manufacturer explanations for higher UK prices, the CA said changing production lines to make right-hand-drive vehicles cost no more than a couple of hundred pounds per vehicle, and nothing at all for Japanese manufacturers making cars for their domestic right-hand-drive market. The Association also dismissed the currency argument, saying that the strength of Sterling could only explain higher UK prices if the price of cars fluctuated with exchange rates.
But the major focus of the 'Great British Rip-Off' campaign is the Block Exemption, the exclusive distribution arrangement sanctioned by the EC, which the CA has criticised for giving manufacturers too much power over their dealers. 'Unless we get rid of the Block Exemption we cannot get rid of the complex monopoly situation,' said McKechnie.