Latest car price report continues to highlight tax

25 February 2002 #SMMT News

Although new car prices in Britain continue to fall, according to independent sources like the Alliance and Leicester, the latest pricing survey once again shows that varying taxation systems are the primary cause of new car price differences across Europe.

The survey, published by the European Commission, points to reductions of more than five per cent in nine UK models compared to the previous six months. It also highlights wide differences in new car prices between countries like Germany and Denmark, which has the highest sales tax in Europe.

SMMT Chief Executive Christopher Macgowan said ‘While tax systems vary so wildly across Europe we will continue to see reports like this. It’s a simple fact that if you want a truly single market with transparent prices then you have to remove the variables that distort the market place.’

As well as tax differences, the EC report confirms that some of the additional cost of certain models in the UK is due to higher specifications than in other European markets. It also recognises the other key variable affecting prices in the UK – the continued strength of Sterling.

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