CAR prices in the run-up to the publication of the Competition Commission's New Cars Inquiry fell by record levels, according to the latest Alliance & Leicester Car Price Index. The 3.6% fall, compared with a 1% drop in the year to February, is the highest since the index began in October, 1999.

BMW, Volvo, Ford, Vauxhall and Alfa Romeo have all cut or realigned prices, but only BMW says it has acted as a direct result of the report. On-the-road prices of Alfa Romeo models have been slashed by 20%, with more than £4,000 cut from the price of some models and specification levels have been realigned and improved across the saloon ranges. A 156 1.8 Twin Spark Standard has gone from £18,001 to £15,404, while a 156 Selespeed comes down from £22,612 to £18,794.

Volvo has also introduced heavily revised S40 saloons and V40 estates with list prices no different from the outgoing models. Improvements to the £14,495 - £21,615 range include new engines and transmissions and higher standard spec worth £800. Vauxhall launched a pre-emptive price-strike ahead of the publication of the Competition Commission's report by reducing prices on Corsa, Tigra, Astra and Vectra to imported vehicle price levels.

Ford has also launched a retail sales initiative, applicable to pre-November 1999 stock only, which sees up to £1,905 cut across its car range. Only BMW has made a public stand to address the issues surrounding the lack of price transparency. It's allowing its 155 dealers to cut prices between April 20 and June 2 across all Year 2000 models by 5%, the equivalent to more than £800 on a 318i.

A spokeswoman for the Society for Motor Manufacturers and Traders said: 'A lot of manufacturers are looking at offering price reductions or more competitive deals with increased spec to get people into dealerships. General market forces are driving prices down.'