Proposals from the EC which are expected to lead to a fall in pre-tax car prices throughout the EU have been generally welcomed by Irish members of the European Parliament.
Meeting in Strasbourg yesterday, the Commission proposed new competition rules aimed at getting a better deal for car-buyers. The new draft regulation will be discussed with interested parties between now and the autumn and is due to take effect, with whatever modifications are deemed necessary, on October 1st.
The regulation will apply to the sale and after-sales servicing of all motor vehicles, including passenger cars, light commercial vehicles, trucks and buses.
Supporters of the move say it will bring an end to the current regime whereby, they claim, manufacturers can effectively maintain one-brand only showrooms, set prices for different national markets and oblige buyers to stick to in-house service centres and warranty provisions.
The draft rules would allow EU car dealers to sell multiple brands on their premises as long as they were kept separate in the showroom. The rules would eliminate the manufacturer requirement for dealer after-purchase service, allowing dealers to subcontract service and repairs.
The changes, said Commission sources, would appreciably liberalise the new-car market in favour of the consumer, easing the way for car sales over the Internet - or even at supermarkets. Subject to certain criteria, Internet companies should be able to sell cars directly to the consumer.
The EU's Competition Commissioner, Mr Mario Monti, gave the example of a Volkswagen dealer in Amsterdam who would in future be free to open a showroom in, for example, Britain and sell Volkswagen Golf models in the UK at the Dutch retail price, which was currently 23 per cent lower than the British price.
On supermarket-style showrooms, Mr Monti said the Commission's plan was for "multi-brand" sale centres in which different cars could be sold but with the makes allocated to different parts of the showroom to avoid customer confusion.
Welcoming the proposals, the Labour MEP for Dublin, Mr Proinsias De Rossa, said: "Successive EU surveys over recent years have shown that pre-tax prices in Ireland are generally 20 per cent higher than the lowest pre-tax prices in other EU countries."
The Fianna Fáil MEP for Dublin, Mr Niall Andrews, said: "These changes announced today by the European Commission are pro-consumer and will give more choice to the European consumer when it comes to purchasing and servicing cars in Europe."
The Fine Gael MEP for Munster, Mr John Cushnahan, said it was "totally unacceptable" to have such a wide variation in car prices throughout the EU. "Irish motorists will not be able to avail of the same benefits as motorists on the Continent because of the excessive levels of Vehicle Registration Tax (VRT) which are levied in Ireland."
The Green MEP for Leinster, Ms Nuala Ahern, warned: "Traffic congestion is going to be a huge issue as a result of car liberalisation and here the Government are thoroughly at fault for inaction over 10 years while congestion got worse and worse."
