Fleet News

Peugeot to cut diesel car prices

PEUGEOT is to cut on-the-road prices of its diesel-engined cars in a bid to reverse the continued decline in oil-burners' sales and force the Government to rethink its diesel policy. The process of realignment closer to petrol equivalents is to start with the 607 executive saloon when it goes on sale in the UK in June. Prices will be announced in May.

The manufacturer's UK managing director, Tod Evans, who last month gave an unequivocal reassurance that the media-hyped 10-15% cut in new car prices would not happen at Peugeot, has vowed that the traditional price gap between diesel and petrol-powered models will be narrowed on all ranges to between £300 and £500 over the next 12 months. The initiative is intended to reduce the ownership cost of a diesel to what it was five years ago, when the premium could be recouped after 25,000 miles, compared with 50,000 miles today as a result of higher duty on diesel fuel - two and a half times the European Union average.

Peugeot's common rail HDi diesels currently cost about £1,000-£1,250 more than petrol models with similar power outputs. The premium reflects the higher cost of manufacturing diesel engines, according to Peugeot. Diesels accounted for 23% of the UK new car sales in 1997. By the end of last year market share had slumped to 12%.

Peugeot says this is as a result of fiscal penalties fuelled by a campaign of 'misinformation' and fears further penalties will be imposed on diesel when new carbon dioxide-based vehicle excise duty and benefit-in-kind taxation regimes are confirmed.

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