Irish car prices show third biggest drop in Eurozone

The European Commission’s latest car price report shows that real car prices (price change set against inflation ) in Ireland fell by 5.7 per cent in 2010. This is the third biggest drop in the Eurozone and well above the -1.5 per cent Eurozone average.

Car prices fell in almost every EU country in 2010. Taking all EU countries together, the average drop in car prices is 2.5 per cent in real terms in 2010. List prices for new cars also converged slightly.

These long-term price trends support the commission’s decision last year that specific competition rules for the sale of new cars are no longer justified.

“It is good to see that consumers in Europe are benefiting from competition in the markets for new car sales and continue to enjoy significantly falling prices in real terms.

“The fact that price differentials between member States narrowed further is a positive indicator of cross-border competition. I am also delighted to see that for the first time in a decade, real EU-wide prices for repair and maintenance services stopped increasing, a sign that the sector has understood the new rules of the game,” said Joaquín Almunia, Commission Vice President in charge of competition policy.

Overall, price differences for passenger cars between member states decreased, as expressed in manufacturers’ price lists. But the differences remain big in some cases pointing to large savings for consumers shopping across borders. Within the Eurozone, the price difference indicator remained unchanged.

The EU price index for cars (reflecting nominal prices paid by consumers, including rebates, VAT, and registration taxes ) increased by only 0.3 per cent, against a 2.8 per cent rise in overall consumer prices, translating into a remarkable fall in real car prices by 2.5 per cent.

A total of 24 EU countries recorded a fall in real car prices. Prices were stable in another two countries (+0.2 per cent in both Italy and Malta ) while they increased in Portugal (+2.6 per cent ). In the latter case, however, it should be noted that buyers benefited from a greater-than-average fall in real car prices the previous year (-6.7per cent ).

The fall in real prices was particularly marked in Slovakia (-17.4 per cent ), Bulgaria (-13.5 per cent ), Slovenia (-11.6 per cent ) and the Czech Republic (-9.0 per cent ). In Poland they decreased by 5.6 per cent.

Among the large markets, real prices decreased most notably in the UK (3.7 per cent ), while Germany, Spain, and France experienced more moderate price reductions (-1.9 per cent, -1.6 per cent and -0.9 per cent respectively ).

The fall in real car prices across the EU continues a trend observed for more than a decade, which indicates that competition between car manufacturers on the market for new cars is working.

Real prices for repair and maintenance, which had increased over the last decade by more than the general inflation levels, did not rise in 2010.

The car price report is part of the commission’s monitoring of the motor vehicle sector. It outlines the list prices of 89 best-selling car models representing 26 brands throughout the EU. The report enables consumers to compare car prices across Europe and take advantage of the opportunities of the EU’s single market.

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