The European Commission’s latest report on car prices shows that prices fell
slightly, in real terms, in the European Union in 2009. The relatively stable
car prices in 2009 owe much to the incentives to buy new cars put in place in
many countries to mitigate the impact of the economic recession.
Although prices fell in 24 out of 27 countries, in the UK they rose by 7.7
percent (Table 1). However, it is not all bad news for the UK consumers: the
2009 figure should be seen alongside the extraordinary fall in prices of minus
9.7 percent in 2008. So overall they are still better off today than at the
beginning of 2008
The EU price index for cars (reflecting nominal prices paid by consumers,
including rebates, VAT and registration taxes) increased by 1.1 percent,
against a 1.7 percent rise in overall consumer prices, translating into a fall
in real car prices of 0.6 percent.
At the same time the report released today shows prices for repair and
maintenance services as well as spare parts continued to rise well above
inflation confirming the need for the stricter competition rules in place for
the sector since the 1 June.
"I am very happy that consumers in Europe are continuing to benefit
from strong competition in the markets for car sales. At the same time, I am
dismayed to see that the price for repairs and spare parts continued to rise
during the economic recession. This shows that bringing more competition in the
after-sales market was the right choice and should pave the way for more
efficient services to the benefit of European consumers," said Joaquín
Almunia, Commission Vice President in charge of Competition Policy.
The fall in real prices was particularly marked in Slovenia (-13.4%), Lithuania
(‑11.1 percent), Slovakia (-11.0 percent) Romania (-10.1 percent), the Czech
Republic (-9.4 percent), Malta (-9.2 percent) and Bulgaria (-9.1 percent). The
fact that most new Member States were harder hit by the recession than the EU
as a whole in 2009 may have contributed to these price decreases. Among the
large markets, real prices decreased most notably in Spain (‑4.7 percent),
while Italy, Germany and France experienced more moderate price reductions
(-1.1 percent, -1.0 percent and -0.6 percent respectively).
Price differences between Member States as expressed by manufacturers' price
lists fell significantly in 2009, with the average standard deviation going
down from 9.8 percent to 8.5 percent (‑1.3 percent) with the exception of the
euro zone, where it increased slightly from 6.0 percent to 6.5 percent (+0.5
percent) (Table 2). This is due mainly to the boost in demand for smaller cars
generated by rather generous fleet renewal subsidies in certain countries.
Overall, price differences for passenger cars remain moderate. By comparison
the EU-wide dispersion indicator for a basket of 16 food products, ranging from
butter to white bread, amounted to 34.4 percent in 2008.
By contrast, prices for repairs and maintenance as well as spare parts
continued to rise well above inflation (+1.5 percent and 0.7 percent
respectively in real terms).
Introducing more competition in the after sales market is the main purpose
of the new competition law framework for motor vehicles adopted in May and in
force since last month. The new rules removed the benefit of the block
exemption for manufacturers whose market share of the repair and maintenance
markets exceeds 30% (most of them, at present) making it easier to deal with
refusals to give technical information to independent garages or to misuse
warranties (see New
European rules to make car repairs cheaper, speech and the Regulation and
The car prices report is part of the Commission's monitoring of the motor
vehicle sector. The report enables consumers to compare car prices across
Europe and take advantage of the opportunities of the EU's Single Market.
The report provides information on prices per country for the major car
A memorandum containing further analysis on price developments is available
Tables are included below.
To get a copy of the full report or for more information, please contact
the London press office on 020 7973 1971.
Please note: all amounts expressed in sterling are for information purposes
Regulation (EU) No 461/2010 of 27 May 2010