WRITTEN QUESTION No. 2999/97 by Graham MATHER to the Commission. New car price discrepancies between Member States
Date: 1997-10-01
Institutions: European Parliament, MATHER
Subjects: EU Member State, application of EU law, competition law, motor car, national currency, price disparity, prices policy, single market

C 158/26

EN

Official Journal of the European Communities

25. 5. 98

(98/C 158/32)

WRITTEN QUESTION E-2999/97

by Graham Mather (PPE) to the Commission

(1 October 1997)

Subject: New car price discrepancies between Member States

A  recent  edition  of  the  BBC  consumer  affairs  television  programme  (cid:145)Watchdog(cid:146)  brought  to  the  attention  of
millions  of  UK  consumers  that  they  could  purchase  new  cars  at  a  cost  several  thousand  pounds  cheaper  in
countries such as Belgium and the Netherlands than in the UK. For example, a Rover 214Si retails at £12 640 in
the UK, yet only the equivalent of £9,570 in Belgium (75.7% of the UK price). Such discrepancies clearly cannot
simply be attributed to the current strength of sterling.

1. What facilities does the Commission have in place to monitor these discrepancies?

2. What factors lie behind the discrepancies, and to what extent does each of these factors figure?

3. What action is the Commission taking to redress these price discrepancies and thus ensure the homogeneity
of the Single Market for the vehicle retail sector?

Answer given by Mr Van Miert on behalf of the Commission

(24 October 1997)

1.
Since  1993,  the  Commission  has  been  monitoring  car  price  differences  in  the  Community  in  its
twice-yearly  report  on  car  prices (1).  This  publication  is  based  on  the  recommended  retail  prices  for  the
best-selling models across the Community, which the manufacturers submit on 1 May and 1 November to the
Commission.

2.
An analysis of the figures in the current report (1 May 1997) shows that the growing price discrepancies
registered in 1996 and 1997 have, in fact, been due mainly to the strength of the British currency, rather than to
changes  in  recommmended  list  prices.  Incidentally,  a  similar  situation  of  increasing  price  differentials  was
caused  by  the  devaluation  of  the  Italian  currency  in  1995 (2).  In  addition,  the  Commission  has  found (3)  that
pricing policies pursued by manufacturers in the individual Member States take into account taxes to be paid on
car purchase. In Member States with high taxes, list prices tend to be lower than in those with no particular tax on
car purchase, such as the United Kingdom. Finally, manufacturers decide their list prices according to economic
considerations, such as demand patterns and market strategies.

The  Commission  does  not  intervene  in  the  pricing  policies  of  car  manufacturers,  except  in  cases  of
3.
infringement of European competition rules. It has, however, underlined the necessity of introducing the euro as
soon as possible (4). It considers that this is the most efficient way to avoid the monetary fluctuations which are
one of the causes for price discrepancies incompatible with the idea and the principles of a common market. The
introduction of the euro should also help ensure that prices are determined solely by economic factors. Member
States,  that  are  not  yet  part  of  the  uro-area,  can  join  the  new  exchange  rate  mechanism  (ERM2),  which  will
contribute to a reduction in exchange rate fluctuations against the uro.

Finally, a growing price transparency, which the Commission(cid:146)s car price reports help to promote, is encouraging
customers to acquire their vehicles in those Member States where prices and other sales conditions are most
favourable. The tendency to do so is increasingly evident in the United Kingdom. This freedom, as assured by the
provisions of the group exemption Regulation on motor vehicle distribution (5), is an important market-related
factor contributing to harmonization of prices across the Community. In this context, also the Community type
approval for new vehicles may be mentioned, as it presents an important accompanying measure facilitating
re-exports by final consumers.

(1)  See for the most recent one IP/97/640 of 11.7.1997, but also IP/96/722 of 29.7.1996 and IP/96/145 of 15.2.1996 press releases.
(2) 
(3) 
(4) 
(5)  Commission Regulation (EC) No 1475/95 of 28.6.1995 on motor vehicle distribution; OJ L 145, 29.6.1995.

IP/95/768 of 24.7.1995.
IP/97/113 of 14.2.1997.
IP/97/640 of 11.7.1997.