EC report confirms cars overpriced in Irish market

The European Commission has confirmed what the Irish consumer already knew – car prices here are a rip-off.

According to an EC report, new cars cost, on average, 10% more here than the lowest pre-tax prices recommended by manufacturers in other eurozone markets.

For certain models, the price differences between Ireland and other EU member states is striking in Greece, for instance, a Nissan Micra costs €7,300 while the Irish pre-tax price is €8,900.

A Skoda Octavia costs €8,800 in Finland, here it's €11,000, while €17,400 is the pre-tax price of the Honda Accord in Ireland compared with €13,500 in Finland.

Car prices before taxes are the lowest in Denmark, Greece and The Netherlands.

Prices in Germany, the biggest market, and Austria remain among the highest within the eurozone. Ireland and Britain remains the most expensive market in the EU.

This latest report is based on car prices as they stood on November 1, 2002. It compares prices for a total of 84 models which represent the bestsellers of 26 manufacturers.

Standard deviation of prices between national markets fell from 10.6% to 10.1% when compared to the last report of May 1, 2002. This convergence takes place against an overall decline of 0.2% in car prices.

"Car manufacturers were given special exemptions from EU competition rules in 1995 on condition that they pass on the benefits of the creation of the abolition of trade borders to buyers.

"This they have failed to do and it is for this reason that new EU rules, leading to lower prices, will come into effect from this coming autumn," said Proinsias De Rossa, Labour MEP.

"The public should be made aware that some manufacturers have been fined very considerable amounts for breaching existing EU rules," he said.

In 2001, Daimler Chrysler was fined €72m for this reason while in 1998 VW was fined €102m.

Car tax such as VRT has a bearing on the final price paid by consumers. "However, the public should be under no illusions, as manufacturers would have us believe, that this is the only factor that influences price," Mr De Rossa said.

In countries such as Spain where taxes are not as high as here or in Britain, recommended car prices are roughly the same.

"Taking recommended prices across Europe as a whole into account, it is clear that manufacturers engage in pricing policies that work to the disadvantage of buyers in Ireland," Mr De Rossa said.