Brussels, 9 July 2010
Antitrust: car prices fell only slightly in 2009 whereas prices for repairs and maintenance continued to rise despite the crisis
The European Commission’s latest report on car prices shows that prices fell slightly, in real terms, in the European Union in 2009 and also converged within the EU's single market. At the same time 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 1st of June. The relatively stable car prices in 2009 owes much to the incentives to buy new cars put in place in many countries to mitigate the impact of the economic recession.
"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 EU price index for cars (reflecting nominal prices paid by consumers, including rebates, VAT and registration taxes) increased by 1.1%, against a 1.7% rise in overall consumer prices, translating into a fall in real car prices of 0.6%.
Real car prices for consumers expressed in the respective currencies fell in 24 out of 27 Member States in 2009 (Table 1). In the Netherlands they were stable whereas they increased in the UK (+7.7%) and Sweden (+2.7%). However, it should be recalled that car buyers in the latter two countries benefited from an extraordinary fall in prices (of ‑9.7% and -5.0% respectively) in 2008, so overall they are still better off today compared to the beginning of 2008. In the UK, the movement in prices also reflects the end of the temporary decrease in VAT, in January 2010.
The fall in real prices was particularly marked in Slovenia (-13.4%), Lithuania (‑11.1%), Slovakia (-11.0%) Romania (-10.1%), the Czech Republic (-9.4%), Malta (-9.2%) and Bulgaria (-9.1%). 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%), while Italy, Germany and France experienced more moderate price reductions (-1.1%, -1.0% and -0.6% respectively).
Broadly, the fall of real car prices across the EU confirms once more the favourable long-term price trend for consumers, which arises from global production overcapacity and intense competition between car manufacturers.
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% to 8.5% (‑1.3%) with the exception of the euro zone, where it increased slightly from 6.0% to 6.5% (+0.5%) (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%1 in 2008.
By contrast, prices for repairs and maintenance as well as spare parts continued to rise well above inflation (+1.5% and 0.7% 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 IP/10/619, accompanying speech and, of course, the Regulation2 and Guidelines).
New car registrations picked up in the second half of 2009, largely due to the impact of car renewal schemes in a number of EU Member States. In total, 14.4 million new cars were registered in 2009. This was not enough, however, to prevent a drop in sales of 1.6% compared with 2008 and 9.5% with the 2007 pre-crisis year.
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:
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
Countries outside the Euro zone
Nominal Car Prices
Real Car Prices
Price differences for a selection of best-selling cars
(expressed as % of prices in euro before tax, comparing the most expensive country with the cheapest country in the euro zone market on 1 January 2010). Source: manufacturers' price lists
A and B:
39.7% (FR; MT)
32.3% (PT; SI)
Fiat Grande Punto/Punto
29.2% (DE; CY)
28.1% (DE; SI)
24.3% (FI; BE/LU)
Medium segment C:
36.0% (FR, MT)
27.4% (BE; FI)
27.9% (DE. FI)
26.8% (FR; SI)
18.1% (DE, IR)
Large car segments
D, E and F:
28.1% (DE, EL)
20.5% (DE, FI)
14.2% (DE, lR)
13.1% (DE, FI)
10.6% (MT, IR)
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
Commission Regulation (EU) No 461/2010 of 27 May 2010