Car prices in the Republic of Ireland will drop following the introduction of new EU competition rules, both the Government and the Competition Authority indicated yesterday.
By Mark Hennessy,
Political Reporter
The assurance comes despite strong warnings from motor dealers that the changes could actually see motor manufacturers increasing the pre-tax prices of their vehicles.
Under the reforms, car dealers will be able to stock a number of different brands while car buyers will be able to buy vehicles in any member-state without extra cost, or hindrance.
In addition, car repairers and car owners will be able to buy "official" spare parts directly from parts manufacturers, rather than at higher prices from the car companies.
In recent years, the European Commission has fined manufacturers such as Opel, Volkswagen and Daimler more than €250 million in retaliation for hindering cross-border sales.
Speaking at the Oireachtas European Affairs Committee, Dr John Fingleton, the Competition Authority chairman, said he believed the reforms would force car prices downwards.
Up to now, the motor industry's representative organisation, the Society of the Irish Motor Industry, has argued that Irish pre-tax prices are lower than anywhere else in the EU to compensate for the high levels of Government tax.
The Competition Authority chairman, however, disputed this: "When you look at specific models, it is possible to find that the prices in five, six or seven countries are cheaper," he told the committee.
In a briefing note for the committee, the authority said: "This will stimulate increased competition between dealers, manufacturers and repairers that will bring improvements for consumers in terms of price, quality and service."
The Department of Enterprise, Trade and Employment's assistant secretary, Mr Brian Whitney, told the committee's chairman, Mr Gay Mitchell: "This will mean cheaper prices. That is our assessment."
Earlier this week, the Minister for Finance, Mr McCreevy, none the less emphasised that a recent European Court of Justice ruling would not force any change in the Vehicle Registration Tax in this State.