Two reports confirm drop in new car prices

27 February 2003 #SMMT News

Two reports confirm drop in new car prices

The latest new car price report from the European Commission shows that UK car prices are still falling. And while some models are more expensive here than in other Euro markets, the report says that part of the difference can be put down to higher UK specifications and currency fluctuations.

Figures issued today by the Alliance and Leicester Car Price Index, which compares prices paid in UK showrooms, also confirm a downward price trend. January saw the 41st consecutive month of falling prices, down 1.3 per cent compared to January 2002.

But while the drop is good news for new car buyers, the European Commission report continues to show price distortions across Europe, caused by wildly varying sales tax. Speaking at the European Automotive Conference in Brussels last week, Competition Commissioner Mario Monti confirmed that the Commission would work to make taxation more straightforward adding that ‘wide differences in tax rules make the single market less transparent and less efficient.’

SMMT chief executive Christopher Macgowan commented, ‘Two reports today show that new car prices are falling. This has been reflected in back to back record years for new car sales with the UK emerging as the second largest car market in Europe.’

But he cautioned, ‘The fact is that in a truly single market place you have to iron out any differences. And the range of sales tax systems throughout Europe represents the single biggest distortion to prices in the new car market.’

Notes to editors:

1. Last year was a record for new car sales in the UK. 2.56 million new cars left UK showrooms.

2. Copies of Mario Monti’s speech to the Ninth Annual European Automotive Conference can be accessed at:|0|RAPID&lg=EN&display

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