Automobile prices in Europe continue to differ by up to 45 percent

Car prices were supposed to be brought in line with each other through an increase in competition. So far there is hardly any sign of that happening.

EU price differences (in euros)
Peugeot 106

Before tax:
6,201 (Portugal)
8,049 (Spain)
Including tax:
8,134 (Britain)
14,814 (Denmark)

VW Golf (IV)

Before tax:
9,917 (Finland)
12,824 (Germany)
Including tax:
12,807 (Britain)
26,139 (Denmark)

Fiat Stilo

Before tax:
10,919 (Denmark)
15,451 (Britain)
Including tax:
16,394 (Luxemburg)
29,631 (Denmark)

Skoda Superb

Before tax:
14,972 (Denmark)
21,625 (Germany)
Including tax:
21,019 (Britain)
44,382 (Denmark)

Munich. Car prices in western European countries car differ by up to 45 percent, a variation that angers EU lawmakers.

EU competition commissioner Mario Monti has introduced new regulations to promote a free market for car buyers in Europe. His hope was that new car prices would fall.

The most recent price comparison by the authorities in Brussels in summer 2003 shows that isn't happening.

EU officials compared prices of 91 models in 15 EU countries. Their survey showed that buyers still find widely differing prices for the same models within the EU.

For 10 of the models the price difference between the cheapest and the most expensive country was 20 percent or more. In some cases it was up to 45 percent.

PSA and the Volkswagen Group have the highest price differences. BMW, DaimlerChrysler and General Motors have the lowest.

Monti's office said increased competition among auto dealers in different EU countries had failed to lower prices.

But car buyers in countries with low purchase tax such as Germany or Austria have benefited from the relaxation of cross border trade barriers.

They only pay their own country's purchase tax even if they buy their new car in a country with very high taxes such as Denmark.

This regulation is called the "country of destination principle." It enables buyers to combine low net prices with low taxes.

Danish car buyers have to pay up to 180 percent in luxury tax when buying a new vehicle.

There is little chance that taxes will be leveled in EU countries. The EU commission says it is not responsible for adjusting of tax rates within EU countries.

The belief that increased competition in the EU's domestic market will result in substantial price decreases for the customers so far hasn't paid off.

According to findings by the British market observers Eurocarprice, new cars cost approximately five percent more within the EU in May 2003 than in the previous year.

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