irishcar.com - Report on pre-tax car prices across EU

23 July 2002: Car price differences between European Union member states have not converged despite the introduction of the euro, according to a European Commission report issued yesterday. The report is based on recommended retail prices before tax provided by the manufacturers.

The biggest price difference for a car between the highest and lowest pre-tax prices jumped to 63 percent for a Fiat Seicento (right) in Britain compared to Spain. In the previous survey, that spread was 50 per cent. The Seicento cost 4,893 euros in Spain, while in Britain it was 7,975 euros, calculated at the exchange rate of the time.

In Ireland, the Seicento at 6,160 euros pre-tax, was 25.9 per cent more expensive than the Spanish car. However, the brand's best selling car here, the Punto, came in the lists at just 13.4 per cent more expensive.

The surveys are taken twice a year. The current one shows that euro zone car prices before tax on May 1 were generally lowest in Spain, Greece, and Finland, while the highest were in Germany and Austria.

Britain, not in the euro zone, had the highest EU prices for more than half the models examined. Denmark, also not a euro country, was among the lower price group.

Other companies with wide price differences are Opel-Vauxhall (with its new Vectra being 39.4 per cent more expensive in the UK and 24.2 per cent dearer in Ireland compared to Spain) and Saab (9-3 model = 27.2/29.5 per cent more expensive UK/Ireland), and Japanese manufacturers Honda (Accord = 31.5/28.7 per cent) and (left) Suzuki (Wagon R+ = 45.4/21.7).

BMW and DaimlerChrysler, along with Ford, showed price differentials within the euro zone of 15 percent or less.

In Ireland, the cars which were the cheapest in the EU were the Alfa Romeo 156, Audi A3, Audi A6, BMW X5, Mercedes S320, and the VW Polo.

The car with the most amount of extra cost, on a percentage term, was the Saab 9-3 at 29.5 per cent.

In absolute money terms, the report finds that a car such as the Fiat Marea - not a big seller in Ireland, but competing against the Ford Mondeo, for instance - could be up to 6,000 euros more expensive before tax in some countries.

There are some stand-out interesting items in the report, such as the Opel Corsa (right) whose differential has dropped markedly from 37.4 per cent this time last year to 18.1 per cent this year - in Ireland it is 10.9 per cent more expensive than in its cheapest market - and the VW Passat, which can be 27.3 per cent more expensive in its most dear market, but in Ireland is only 4 per cent above the cheapest.

The report pours cold - or at least tepid - water on the manufacturers' claim that they deliberately set their prices lower in high-tax markets in order to keep the end-cost reasonable to the consumer, noting that in other member states where no such high taxes are charged, prices before tax may be roughly similar - as in Spain - or much higher, as in Germany.

The prices as submitted were adjusted according to local specifications, to provide a more accurate picture, but the commission notes that actual retail prices in different markets may not be the same as the RRPs.

Apart from the Opel Corsa and the VW Passat details mentioned above, some other examples are of particular interest to Ireland. The Renault Clio has an EU-wide divergence of 19.5 per cent, and in Ireland it is 18.4 per cent more expensive than in its cheapest market. The Renault Megane, on the other hand, has a 26.5 per cent overall divergence, but in Ireland is only 7.5 per cent more expensive.

Peugeot's 106 at 24.4 per cent more expensive in its dearest market, is only 4.2 per cent more expensive in Ireland. Ford's Mondeo has a 21.5 per cent divergence across the EU markets, but in Ireland is only 1.7 per cent pricier than in its cheapest outlet.

As examples of the tax effects in Ireland on the end-price, the Opel Corsa at 8,409 euros pre-tax retails in the showroom for 13,915. The VW Golf at 10,543 pre-tax has a sticker price of 18,175. And the BMW 318i before the tax has an RRP of 21,176, but when VRT and VAT are added, the showroom tag is 36,300, before dealer charges.

(All the above were for entry-level versions.)

The information in the report makes it easier for consumers who want to import from abroad in order to save money, though premiums are charged for such things as the provision of right-hand-drive. The report finds that Japanese manufacturers generally charge a lower supplement for RHD than, while the highest charge for this comes from the VW group.

There is nothing to stop citizens of any EU state from buying their car in another state, and the EU has fined a number of manufacturers in the past who tried to prevent this. Most manufacturers now have set up 'hotlines' to facilitate any buyer who might be having difficulties.