• UK car prices still falling but survey claims gap with Europe widening

  • Euro slips 10 per cent and distorts pre-tax price comparisons




  • The latest EU pre-tax price survey conducted when the Euro was at its all time low (1 May 2000, 1.7166 Euro per £1) highlights once again how exchange rate fluctuations distort the true picture of car prices across Europe.

    New car prices fell nearly six per cent in April this year as part of a two-year downward trend, yet the latest EU survey shows growing pre-tax price differences between the UK and other European countries.

    The graph clearly demonstrates the reason for these variations since the value of sterling has risen by 44 per cent since May 1996 and by 10 per cent in the six months since the last pre-tax price survey. Countries within the Euro zone with fixed exchange rates have seen pre-tax prices remain stable.

    Leading motoring commentators are now widely endorsing the view that there are excellent deals on offer. Quotes such as 'there has never been a better time to buy' tell the true story of the competitive nature of the UK car market and the excellent value on offer to customers.

    SMMT Chief Executive Christopher Macgowan said 'The motor industry is actively working towards price harmonisation across the European Union through falling prices in the UK, but the weakening Euro and perverse taxation system conspire to thwart our goal.

    'No business on earth can square the fiscal circle as the Euro plummeted a further 10 per cent since November 1999 and car taxation levels varying between 15 and 218 per cent across a common trading zone,' he concluded.