Car prices in Europe: evolution and differences between member states: Slovakia prices in free fall, for best deals shop in Hungary

The European Commission has released its car price survey for last year.

The report focuses on pricing differences between EU member countries by comparing price lists of cars in member states, and adapting major equipment differences.

This study has been issued on a regular basis since 1993 and has strongly influenced manufacturers to narrow the price differences of cars between EU member states or face (unwritten) a totally liberalized market.

Major differences occur often in pre-tax prices, since in countries where cars are heavily taxed, competition between manufacturers often drag fully taxed prices down. With the Euro, gaps have been considerably reduced as currency variation could not explain differences any more, and that price variations between countries became more visible to consumers.

Slovenia shines as one of the cheapest markets of the Eurozone after Greece. In the small car, it is the least expensive Eurozone country for 7 models out of 30. When it is more expensive, difference rarely reaches 5% difference with the nearest country.

As for another Euro country, Slovakia, the most important information is that according to the report, prices of new vehicles have dropped more than 17% when average prices in Europe dropped only 2.5%. It is no surprise that the used car market suffered as it did. I recalled on my website some used car professionals talking about sales prices going down one third.

We know that the Czech and Polish markets are highly competitive. The report shows it as the Czech Republic is cheaper than any Euro country for 7 models out of 20 from the small car segment and for 6 models out of 20 for the lower compact segment (Škoda Octavia…). It is to be said that this result is achieved even though the Czech Crown has appreciated against the Euro 3% between January 2010 and January 2011.

But the palm of attractive car prices is Hungary: in the small car segments, it shines as the cheapest country in almost half of the most selling models. In the lower intermediate segment, Hungary is the cheapest market for 5 out of 20 models.

Read more at> http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/921&format=HTML&aged=0&language=EN&guiLanguage=en

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Used cars with no kilometers shown?

I visited on the road a large used car retailer to take a look at its operations in a surviving sales site (one sales site in Slovakia was closed last year).

Some cars are shown without the number of kilometers. It simply says “unknown”

It looks bad, but this is a major improvement.

Let’s face it; our countries in general were a fantastic oasis for remarketing high mileage cars from Western Europe. What Germans and French did not want, the Poles and Slovaks took. Well, let’s say that some importers took at low prices cars that were magically improved and sold at higher prices…much higher prices. After all, these cars had less than 100000 kilometers…

So I applaud transparency in this business.

Transparency will clean up the offer of used cars, and correct prices. It will help the establishment of an intermediate used car market and help develop inter dealer B to B trading by creating stronger market price differentiations between products.

Perhaps, the money invested by manufacturers in used car programs (Peugeot, Citroen, Kia and Škoda among them) will pay out.

Best operators, and best advised operators might take the train of this opening of business. If they do not, AAA Auto will take the food right out of their mouths regardless of the quality of their certified used car programs.

For leasing companies and manufacturers, the oasis of markets that buy everything  is drying up. I foresee strong corrections in price depreciations in the near future.