Car makers shift blame for UK prices

Car makers blamed governments, exchange rate fluctuations and survey methodology this week for allegations that new car prices in Britain were the highest in Europe. The Society of Motor Manufacturers and Traders was left to defend the industry at an open hearing of the UK’s Competition Commission into new car prices on Tuesday. The car […]

Car makers blamed governments, exchange rate fluctuations and survey methodology this week for allegations that new car prices in Britain were the highest in Europe.

The Society of Motor Manufacturers and Traders was left to defend the industry at an open hearing of the UK’s Competition Commission into new car prices on Tuesday.

The car makers refused to attend the hearing on the grounds that there would be insufficient time to deal with the complex issues involved and that they did not want to reveal confidential information. Ford and Rover were among those who said they would cooperate with the commission privately.

`Motor manufacturers support moves towards greater price harmonisation, but this requires governments to pursue tax harmonisation and exchange rate stability with greater enthusiasm,’ the SMMT told the hearing.

The UK car market has remained the most expensive in Europe for the past two years, according to an EU survey.

This survey `has formed the basis for charges of profiteering’ admitted SMMT head of policy and economics, Paul Everitt. But, he added, `the results are heavily influenced by exchange rates’.

In May 1996 when sterling was worth DM2.32, the UK was one of the cheapest markets.

The survey’s reliance on list prices was `an area of possible distortion’, as it failed to consider the effect on the price of such elements as part exchange, individually negotiated discounts, and free servicing or breakdown assistance.

Also, car tax variances across the EU meant there was less actual difference in on-the-road prices, the SMMT argued.