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Fleet News Europe Conference 2004: New car prices are slowly harmonising

THE pre-tax price of new cars is starting to harmonise across Europe, conference delegates were told.

Philip Wylie, automotive team leader, corporate finance, at tax consultant PricewaterhouseCoopers, said the average pre-tax price had increased over the past 12 months.

Wylie said: 'The UK is slightly more expensive than France in terms of pre-tax prices but Germany is the most expensive. Prices have harmonised across Europe.'

He said a number of factors contributed to an average percentage change in pre-tax prices over the last 12 months.

These include price (1.5%), specification (-0.6%), volume mix (2.8%) and currency (0.9%).

Wylie said: 'Specification has a negative impact, which basically means you are getting more car for your money.

The market is getting more volume and mix, which has a positive impact.'

Certain models have risen in price and these include those in the lower-medium, MPV and luxury segments that are among the most popular with new car buyers.

'Car manufacturers will obviously take advantage of strong demand,' Wylie said.

Overall European average price movement by segment over the past 12 months are mini (-1.2%), small (1.2%), lower medium (4.7%), upper medium (2.5%), executive (6.4%), luxury (1.2%), full-size MPV (3.5%), large SUV (2.8%), small MPV/SUV (4.1%), sport coupe (0.5%), cabrio and roadster (1.8%).

Wylie told delegates that changes in the UK car sales and repair market had only just begun.

He said further consolidation was required if cost was to be taken out and parts and service 'were likely to be a battleground with big dealers starting to be more aggressive'.

He added that approved repairers were likely to pose the biggest threat to future dealer profitability but that such situations offered fleets the opportunity to source cheaper suppliers.

  • For full copies of the Fleet News Europe Conference 2004 presentations in Powerpoint and pdf format click here.
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