THE average price of a new car across Europe is rising faster than a year ago, with diesels increasing more than their petrol equivalents, according to a new survey.

But the UK is one of just two EU countries where prices have fallen in the past 12 months. Experts blame the growing popularity of diesel cars for the overall price rise which on average across Europe is up by 3.9% in the year to June.

The price of diesel cars was about 4.5% higher in June this year compared with the same month in 2004 while petrol models increased by an average 3.4%, according to a quarterly pricing survey carried out by PricewaterhouseCoopers and eurocarprice.com.

Chris Hibbs, UK automotive leader at PricewaterhouseCoopers, said: ‘Diesels now account for nearly half of all cars sold in Europe and there is no sign of the trend slowing.

‘Vehicle manufacturers usually charge a premium for diesel models over petrol versions, so the inexorable rise in diesel sales will have a positive effect on their total revenues.’

The study reveals that diesel accounts for 70% of new car sales in countries like France and Belgium. The largest annual rises in diesel sales were in Hungary (54%), Norway (45%) and Portugal (31%). Only Greece and Poland saw diesel car sales fall compared with a year ago.

The most expensive new car market in Europe is Denmark where prices are about 94% higher than the Eurozone average. The least expensive market is the Czech Republic, where prices are 8% below average.

The study said: ‘The UK has the distinction of being the only car market in Europe apart from the Czech Republic, where car prices are falling. As the UK car market continues to decline (4% down on the previous year), average new prices are now 0.9% lower than they were in June 2004.’ The price situation in the main European countries is mixed.

Spain is experiencing ‘significant’ price increases while in France and Germany increases are described as ‘below average’. Italian prices are also showing a marked increase despite a declining market for new cars.

In terms of volume, Norway and Denmark are experiencing the largest market growth in Europe, while the market in Finland dropped by more than 15% in the year to June compared to the preceding 12 months.

Sales fell in Eastern Europe, particularly in Poland and Czech Republic.