Falling UK car prices offset by tax differences

19 February 2001 #SMMT News
  • UK car prices drop 10 per cent in the six months to November

  • The gap in pre-tax prices between UK and Europe is narrowing
  • Despite a significant reduction in UK new car prices, the latest

    EU car pricing survey once again shows that varying taxation systems throughout

    Europe is a primary cause of new car price differences.

    The report, which looks at pre-tax prices rather than the price

    paid by consumers at the showroom, shows that UK prices have dropped by more

    than 10 per cent since the last research in June 2000. But pre-tax prices are

    still reported to be higher in the UK than in mainland Europe.

    The European Commission findings mirror those of the recent

    Credit Suisse report for Credit Suisse concluded that ‘whilst

    the average man in the street may see the manufacturers as guilty of exploiting

    the consumer, the real key to harmonising prices could prove to be fiscal changes

    that would make it much easier for manufacturers to address this highly complex


    SMMT Chief Executive Christopher Macgowan said ‘The motor industry

    is actively seeking price harmonisation across the European Union but although

    prices are falling in the UK, widely varying taxation systems and the high rate

    or sterling continue to thwart our goal.’

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