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Honda follows the luxury sector with price cuts of up to 15 percent

HONDA has become the first volume manufacturer to announce wholesale price cuts across its range in the latest round of realignments triggered by the Competition Commission's new car price legislation.

The reductions mean mainstream models like the Civic and Accord fall by as much as £1,755. An Accord 1.8 SE now costs £16,995, while a Civic 1.4 comes in at £11,495.

Yesterday, Volvo and Saab were the last premium marques to reduce prices in the ongoing realignment of the new car market. The Swedish carmakers cut prices by between 4.7 and 21 per cent across their ranges.

Volvo is the second Ford subsidiary to lower list prices but Saab's decision is the first time a General Motors subsidiary has reacted. After this and the Honda announcement, speculation is now mounting that the parent companies are poised to move in a matter of days.

The entry level Volvo S40 1.6 now gets alloy wheels and a CD player as standard, while the more upmarket models are reduced by between £750 and £2,400 for the T4. V70 models get £1,400 worth of extra equipment, while S80 prices fall by 10% - making the 2.4 140bhp £2,295 cheaper at £20,640.

Saab has reduced list prices by nearly 5 per cent on most of its popular models. A five-door Saab 9-3SE 2.0 turbo now costs just £19, 295 on the road, a reduction of £1,750, while a five-door Saab 9-3SE 2.2TiD is now priced at £18,495, a reduction of £1,750. The entry level 9-5 2.0T now costs £21,395.00 – a saving of £1,400.

Jaguar cut list prices earlier this week after BMW and Audi announced cuts last week. Volkswagen Group sister company SEAT also lopped up to £800 off the list price of its revised Alhambra people carrier.

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