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Brussels, 22 July 2002

Car prices in the European Union: still substantial price differences, especially in the mass market segments

In its latest report on car prices, the European Commission has found that price differentials for new cars in the Internal market are still substantial, despite the introduction of the euro. The situation as of 1 May 2002 shows that no significant price convergence has yet taken place. Spain, Greece, Finland and Denmark, a non-member of the euro zone, are the markets where car prices before tax are generally the lowest. Prices in Germany, the biggest market, and Austria, are the highest within the euro zone. The survey shows no discernible pattern of price approximation between the cheapest and the most expensive national markets, that is, price increases in the former and/or price decreases in the latter. Competition Commissioner Mario Monti declared: "Our monitoring of price differentials and other indications have been regularly confirming that there is significant room for improving the functioning of the internal market in the motor vehicle sector. The reform adopted by the Commission on 17 July 2002(1) creates the right conditions for competition in car sales and servicing, making the internal market work to the advantage of European consumers and economic operators alike."

This report on car prices portrays the situation on national car markets on 1 May 2002, that is four months after retail prices started to be denominated in euro in the twelve Member States participating in the monetary union. Therefore, the report gives an indication as to whether pricing policies have been adapted in response to monetary integration and as to the extent to which competition forces are instrumental in integrating markets. For the moment, enhanced price comparability due to the Euro has not led to greater price convergence.

The price differentials mentioned in this press release are based on the manufacturers' recommended retail prices net of tax. The full report gives prices both before and after tax. It compares prices for a total of 81 models, representing the best selling cars of 26 manufacturers.

Within the euro zone, Germany and, to a lesser extent, Austria, still remain the most expensive markets. In Germany, a total of 41 models are sold to consumers at the highest prices in the euro zone and 36 of these are between 42% and 20% more expensive than in at least one other national market. In fact, differentials of more than 20% appear as well for 23 models in Austria. The cheapest markets in the euro zone are Finland with no differential above 20% for the models surveyed and The Netherlands with only one differential above 20%.

In absolute values, which are more relevant than percentages for end-consumers, the price differential on a car in the middle of the segment spectrum (Fiat Marea, segment D) may attain in certain cases as much as 4 600 Euro within the Euro zone and 6 000 Euro within the European Union as a whole. These values provide a relevant indication of the potential savings which consumers may obtain by exploiting price differences in the European Union. The new rules governing car distribution should simplify these purchases, whether made directly by end-consumers, or through an intermediary who buys on their behalf. Competition Commissioner Monti has re-affirmed his commitment to investigate restrictive agreements and practices by car manufacturers that directly or indirectly impede EU citizens from buying a car in another Member State(2).

As regards the United Kingdom, it should be noted that this market continues to be the most expensive for more than half of the models examined. Since the prices in the United Kingdom are still much higher than elsewhere, many British consumers continue to try to buy cars from continental dealers. The Commission often receives complaints from British consumers who encounter obstacles when purchasing a car in another Member State, in particular, concerning long delivery times or high right-hand drive supplements.

Some highlights within the euro zone

Price differences for a selection of best-selling cars (expressed as percentages of prices in Euro before tax, comparing the most expensive with the cheapest Euro zone market) on 1st May 2002 were as follows :

Small segments

A and B:

Opel Corsa18.1%36.9%37.4%
Ford Fiesta n.a16.4%16.5%
Renault Clio19.5%26.4%31.3%
Peugeot 10624.4%20.3%23.5%
VW Polo22.6%14.7%28.0%

Medium segment C:

VW Golf30.5%34.5%33.1%
Opel Astra21.4%32.2%51.6%
Ford Focus24.4%21.0%18.6%
Renault Mégane26.5%22.9%25.8%
Peugeot 30727.2%29.6%24.2%


Large segments

D, E and F:

BMW 318I11.2%11.6%13.4%
Audi A 411.9%13.5%13.7%
Ford Mondeo21.5%20.5%22.2%
Opel Vectra28%41%48.5%
VW Passat27.3%23.1%22.3%

Price differentials across car segments

Overall, price convergence within different car segments has not greatly varied since the last report. The above examples of the most popular car models show that price differentials have increased for six models and decreased for eight models. As in the previous survey, the Commission has found that in the first four segments (A to D), where the high number of models from different competitors would normally lead one to suppose that competition should be strong, the average price differential within the euro zone is much higher (well above 20%) than in segments E, F and G.

Manufacturers' pricing policies

Across the euro zone, General Motors (Opel-Vauxhall, Saab), despite some recent price alignments on the Opel brand, the Fiat group (Fiat, Lancia, Alfa Romeo), Honda and Suzuki, are the groups which have the widest price differences. On the other hand, in general, certain German manufacturers (e.g. BMW and DaimlerChrysler) and, to a lesser extent, Ford (Ford, Volvo, Land Rover) limit price differentials within the euro zone to 15% or less.

The generally low pre-tax prices in Finland, Denmark and Greece are largely due to manufacturers' pricing policies and, to a lesser extent, in response to high taxes on car purchase in those Member states. Most manufacturers fix pre-tax list prices at a low level, alleging that this is necessary to make the after-tax prices affordable. However, in other Member states where no such taxes are charged, prices before tax may be either roughly similar, as in Spain, or much higher, as in Germany(3).

In the United Kingdom, car prices include the additional cost of UK specification, in particular right-hand drive, and are affected by the high value of the British Pound. All of these aspects have to be taken into account when analysing the causes for high price differentials. The Commission has found that for British and Irish consumers buying a car in another Member State, the supplement for right-hand drive specification is generally the lowest for models from the Japanese manufacturers, and the highest for models produced by the Volkswagen group (VW, Audi and Seat).


The methodology used is the same as that employed in previous reports: a total of 18 (previously 17) European and 8 (previously 7) Japanese manufacturers supplied the Commission with the recommended retail prices, as of 1 May 2002, of 81 of their best-selling models.

The reference price for the calculation of differentials for any model is that of the cheapest country within the euro zone. Prices are adjusted for differences in standard equipment, and are given in euro and local currency(4), both before and after tax. Prices for major options and for right-hand drive specification are also supplied, together with other information. For some models, further options and variations in standard equipment may exist on certain national markets. It should be noted that actual retail prices may differ from recommended list prices, as dealers must be free to set their own prices and to offer additional financial benefits to customers, depending on the market.

Information for the public

With a view to increasing transparency and providing better information to the public, the Competition Directorate General provides easy access to data by making the report available on its Website:

  • Press release, condensed electronic version of the report and manufacturers' price tables:

  • Full paper copy of the report:

  At the Commission Offices in the Member States

  Addresses available on the Internet at

  • Information centres for car buyers (telephone "hotlines"):

(1) See IP/02/1073 .

(2) Since 1998, the Commission has imposed fines on Volkswagen (twice), Opel and Mercedes for obstacles to paralell trade between Member States or resale price fixing.

(3) In this context, attention should be drawn to a study analysing the causes for car price differentials. This study "Car price differentials in the European Union - An economic analysis" has been prepared by an independent consultant. The study shows that tax policies are but one among the explanatory factors for price differentials (see for more details the website of the Competition Directorate-general mentioned at the end of this press release).

(4)The euro rates used for conversion are those published in the Official Journal C 106 of3.5.2002, p.1.

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