Fleet News

Car price action but no big shake-up

A SEVEN-point action plan to increase competition among suppliers of new cars and thereby reduce prices has been announced by Trade and Industry Secretary Stephen Byers. However, Byers has fallen a long way short of ordering a wholesale shake-up of the UK new car industry despite calculations that private car buyers in Britain are paying £1 billion a year too much for their new cars.

Any major shake-up in the UK dealer network must go before the European Commission - the existing block exemption runs until September 2002 - and there is no guarantee of price cuts despite moves by the Government to ensure 'fair play'. Monday's long-awaited publication of the 737-page Competition Commission report into the supply of cars in the UK concluded that prices in the UK have been 10-12% higher than in similar countries in Europe, and private car buyers are paying about 10% or £1,100 too much - totalling about £1 billion a year - for the average car, after taking account of discounts, trade-ins and finance deals.

In publishing the report at the end of a nine-month investigation, Byers said the findings 'cannot be ignored'. He added: 'They represent a clear and unambiguous call for change. The report confirms what many people have thought was the case - that in Britain we are paying over the odds for new cars. The reason for this is that the market is not operating as competitively as it should.'

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