Fleet News

Manufacturers slow to harmonise pre-tax prices, report

A NEW report has found 'virtually no movement' by manufacturers to harmonise pre-tax car prices within the Eurozone.

The latest eurocarprice.com European Car Pricing Review, that tracks the retail and pre-tax prices of cars in nine European countries and compares the prices to an index of 100.

Retail prices show a variance among the countries surveyed of 23% - up from 17% three years ago.

They vary from 15% below the Eurozone average in Greece, to 8% above it, in Germany. The smallest year-on-year increase was in the UK, 0.8%, while the highest was in France, up 5.6%

Eurocarprice.com publishes indices of European car prices on the Internet, comparing retail and pre-tax car prices to an index of 100, which represents the average price in all Euro currency countries.

The report's authors say its findings 'show that there has been virtually no movement towards harmonisation of manufacturer's pre-tax prices within the single currency zone'.

Switzerland has the highest pre-tax prices, the study found, with Germany and Austria also above average.

It adds: 'The lowest base prices are in southern Europe, notably Greece, Spain and Portugal.'

Rick Yarrow of eurocarprice.com said: 'Price differentials are driven by widely varying levels of car taxation. Only Greece has changed its car tax since 1999, so it is not surprising that price differences remain. It seems very unlikely that Governments will work together to harmonise car taxes.'

Fleet News Europe contributor Professor Peter Cooke, of Nottingham Business School said: 'It is very difficult to move towards a single competitive market if individual governments insist on putting their own interests first. Changes in block exemption put a burden on the manufacturers while governments continue as before.

'Motor manufacturers would appear to have a more pan-European competition philosophy than the member states. Perhaps car buyers are beginning to realise that individual governments have as much, if not more, influence on new car prices as the manufacturers.'

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