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2009 Car prices report: slight fall across the EU, but rise in the UK
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09/07/2010 00:00:00

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.

Background:
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[1] 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[2] and Guidelines).

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 models.


A memorandum containing further analysis on price developments is available at:

http://ec.europa.eu/competition/sectors/motor_vehicles/prices/report.html

 

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 only.

 

[1] Commission Staff Working Document COM (2009) 591: Improving price transparency along the food supply chain for consumers and policy makers, p.15. http://ec.europa.eu/economy_finance/publications/publication16073_en.pdf

[2] Commission Regulation (EU) No 461/2010 of 27 May 2010

    TABLE 1

    Year-on-year change in price index and real car prices in %

    (January 2010 compared with January 2009)

     

    Car prices are expressed in local currencies, taking into account rebates. Source: Eurostat

     

    Euro Zone

    countries

    Nominal Car Price

    Headline inflation

    Real Car Prices

    Austria

    -1.2

    1.2

    -2.4

    Belgium

    0.3

    0.8

    -0.5

    Cyprus

    -5.8

    2.5

    -8.3

    Finland

    -0.5

    1.6

    -2.1

    France

    0.6

    1.2

    -0.6

    Germany

    -0.2

    0.8

    -1

    Greece

    -4.7

    2.3

    -7

    Ireland

    -7.9

    -2.4

    -5.5

    Italy

    0.2

    1.3

    -1.1

    Luxembourg

    1.1

    3.0

    -1.9

    Malta

    -8.0

    1.2

    -9.2

    Netherlands

    0.4

    0.4

    0

    Portugal

    -6.6

    0.1

    -6.7

    Slovakia

    -11.2

    -0.2

    -11

    Slovenia

    -11.6

    1.8

    -13.4

    Spain

    -3.6

    1.1

    -4.7

     Euro zone

    -1.1

    1.0

    -2.1

     

     

    Countries outside the Euro zone

    Nominal Car Prices

    Headline inflation

    Real Car Prices

    Bulgaria

    -7.3

    1.8

    -9.1

    Czech Republic

    -9.0

    0.4

    -9.4

    Denmark

    -0.5

    1.9

    -2.4

    Estonia

    -6.9

    -1.0

    -5.9

    Hungary

    5.6

    6.2

    -0.6

    Latvia

    -8.3

    -3.3

    -5.0

    Lithuania

    -11.4

    -0.3

    -11.1

    Poland

    2.8

    3.9

    -1.1

    Romania

    -4.9

    5.2

    -10.1

    Sweden

    5.4

    2.7

    2.7

    United Kingdom

    11.2

    3.5

    7.7

     

    EU

    Nominal Car Prices

    Headline inflation

    Real Car Prices

     

    1.1

    1.7

    -0.6

     

     

     

    TABLE 2

    Price differences for a selection of best-selling cars

    (expressed as % of prices in euro before tax, comparing the most expensive –left - with the cheapest model – right - in the euro zone market on 1 January 2010). Source: manufacturers' price lists

     

    Small segments

    A and B:

    1/01/2010

    1/01/2009

    1/01/2008

    Peugeot 206/207

    39.7% (FR; MT)

    32.7%

    32.6%

    Renault Clio

    32.3% (PT; SI)

    44.9%

    23.4%

    Fiat Grande Punto/Punto

    29.2% (DE; CY)

    30.4%

    21.4%

    VW Polo

    28.1% (DE; SI)

    26.8%

    25.0%

    Ford Fiesta

    24.3% (FI; BE/LU)

    17.9%

    21.4%

     

    Medium segment C:

    1/01/2010

    1/01/2009

    1/01/2008

    Peugeot 308

    36.0% (FR, MT)

    31.7%

    37.5%

    VW Golf

    27.4% (BE; FI)

    25.8%

    24.3%

    Ford Focus

    27.9% (DE. FI)

    28.7%

    27.4%

    Renault Mégane

    26.8% (FR; SI)

    51.6%

    17.3%

    Audi A3

    18.1% (DE, IR)

    17.4%

    14.5%

     

     

    Large car segments

    D, E and F:

    1/01/2010

    1/01/2009

    1/01/2008

    VW Passat

    28.1% (DE, EL)

    24.1%

    17.1%

    Peugeot 407

    20.5% (DE, FI)

    39.0%

    15.2%

    Mercedes C

    14.2% (DE, lR)

    12.8%

    11.9%

    Audi A4

    13.1% (DE, FI)

    17.0%

    7.4%

    BMW 320D

    10.6%  (MT, IR)

    10.3%

    12.0%

     

     

    Last update: 31/10/2010  |Top