The price advantage enjoyed by independent imports from Europe over cars sold through 'official' UK franchised dealerships is now negligible as the majority of Internet-based importers begin to increase prices and UK dealers become more competitive, says the latest car price check report from Autohit plc.

The analysis is based on the top 14 models searched by 80,000 internet car buyers on the Car Price Check web site between November 2000 and March 2001.

The report also highlights the wide fluctuations in price on a month-by-month basis between the two sources, with UK sources supplying 46 percent of the sample cheaper than European retailers in December alone.

However, UK dealers are being warned that it is folly not to adopt aggressive pricing from the start of any negotiation.

"From the raw data we have, it is clear that dealers appear to be waiting for consumers to find the best price before they react competitively.

"Consumers reject most initial dealer quotations if they are not immediately competitive, a sad reflection that some dealers have failed to recognise that they may not get that second chance to make a first impression with a digital car buyer," said Autohit CEO Steve Evans.

Although there may still be a gap between European- and UK-sourced list prices at present, when it comes to actual transaction prices the difference is far from being a gulf. In more than 41 percent of cases, the saving offered by the importer over the average UK dealer price was so low as to raise a question mark over the benefits of buying from Europe.

Some UK sourced cars are now significantly cheaper to buy than those from the continent. For example, the Citroen Xsara Picasso showed a £1,971 ($US2,800) price difference (or 14.29 percent saving off the manufacturer's list price) between the most competitive UK supplier and the most competitive importer. A similar case can be made for the Mercedes E Class and Renault Megane Scenic.

Two suppliers who have consistently championed the consumer and the attraction of importing from Europe, Carbusters (operated by the Consumer Association) and Virgin Cars, have actually recorded a rise in transaction prices during the period for the majority of models studied, Autohit claims.

Carbusters now supplies 72 percent of the sample at a higher price today than in November. It is similar for Virgin Cars whose transaction prices have increased for 88 percent of the models it was able to supply from the sample. Virgin Cars was also more expensive than the average UK dealer price - not necessarily the lowest price obtainable - on 60 percent of the models analysed.

This trend compares to the recorded fall in prices of 66 percent for all the UK dealer sourced models during the November to March period. Similarly, the other major brand-led etailer, Direct Line's JamJar operation, recorded a fall in prices for 80 percent of the models it was able to source.

Significantly, the analysis demonstrated the volatility of new car prices with wide fluctuations in actual transaction costs throughout the four-month period. This trend was recorded for all suppliers whether Internet, traditional or importer and indicates the increased consumer-driven competitive pricing that is now part of the UK motor retail landscape.

When it comes to lower prices month-on-month, importer Oneswoop has demonstrated a spectacular willingness to consistently increase the discount it offers over UK list prices, so much so that it was the cheapest supplier for 66 percent of the models sampled.

Yet, even on those models where Europe is consistently the cheaper source - e.g. the Peugeot 206 2.0 GTi - the UK dealer has dramatically bridged the gap.

Although, the price advantage of buying the model from Europe fell from £1,500 ($US2,100) in November to only £794 ($US1,130) in February, it has again opened in March as a result of some apparently aggressive pricing from Carbusters with an effective discount of 14.77 percent on offer.

"The clearest message for the industry has to be that competitive forces and consumer pricing benefits can and do change dramatically. Such movement is happening over a short period of time and should therefore be monitored," said Evans.

"More than ever, manufacturers and franchised dealers need to understand how their product is being priced and sold to the UK consumer.

"The Internet has given the consumer access to knowledge. Manufacturers and dealers need to make that search for knowledge a part of their marketing mechanism."


To read an Autohit feature article, please follow the link below:-

Internet, Brands, eCRM and DCB....the perfect mix

To view related research reports, please follow the links below:-

The Outlook for eBusiness in the Automotive Industry

Global Car Forecasts to 2005

The Future of Car Retailing in Mature Western Markets