Fleet News

Car pricing: shake-up promises fizzling out

THE predicted shake-up in UK new car pricing in the wake of the Competition Commission's inquiry is unlikely to take place as civil servants grapple with the difficulties of writing new legislation. Following revelations that some of Britain's biggest fleets - such as the public utilities - as well as daily rental companies and Motability, could still be able to continue to receive the biggest discounts in the country, it has emerged that other fleet deals also look set to continue unchecked by the Government. These could include dealer and other demonstrators, manufacturers' own business cars, courtesy cars and bodyshop cars, leaving only 'normal' fleets subject to restrictions.

Many of these have long-term contracts with manufacturers, which would be difficult to rip-up - and their buying terms are little different to those enjoyed by private buyers taking into account deals and offers available including part exchange arrangements.

May 19 is the deadline for responses to the Government's seven-point 'immediate remedies' plan issued last month by Trade and Industry Secretary Stephen Byers. Civil servants then have until June 10 to draft the legislation to enact the recommendations. But many industry sources are making it increasingly clear that while the manufacturers want to work closely with the Department of Trade and Industry to draft the required Orders, it is becoming increasingly difficult to make the legislation workable.

Byers says the action plan is designed to 'bring more competition to the supply of new cars and so help reduce prices'. He has also threatened to axe recommended retail prices if new car prices don't fall.

Ford fleet operations director Mike Wear said: 'We hope there is a willing ear at the DTI because we want to help the civil servants write the Orders to ensure they are workable because if they are not and fleets feel they are not fair they could be challenged with the Office of Fair Trading. Civil servants must understand the ramifications of the orders and particularly how a way is found through the minefield of existing contracts.'

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