ECONOMY

Greek taxes on new cars favor the small budgets

Automobile prices in Greece remain low, according to the new comparative price survey by the European Commission concerning vehicle prices in the member countries, published in Brussels yesterday. According to the survey, the gradual deregulation of the automobile market along with the opening of the market for car parts is leading to price convergence on a European level, with the 10 new member countries exhibiting lower prices than the older members. Price differences among the 12 countries of the eurozone were slightly reduced to 4.4 percent in comparison with 4.9 percent reported in the previous survey. Based upon the prices of 90 different car models available in the eurozone, the European Commission determined that the German market is still the most expensive while Finland offers the cheapest car prices, taxes included. The survey notes that car prices were 0.8 percent higher in May, year-on-year, while the annual inflation rate during the same period amounted to 2.4 percent. In Greece, as in other countries favored by low producer prices, there were no substantial increases in retail prices, with the exception of Denmark, where prices rose by 2.5 percent, and Finland, where prices fell 2.9 percent. In Greece prices remained stable and the European Commission noted that this shows deregulation is not adversely affecting the consumer. However, high price increases were registered in some of the new member countries, with those in Poland rising by 8.7 percent and in Latvia by 8.9 percent. Comparisons revealed that member states have very different tax regimes for the categories of «expensive» and «cheap» car models. Greece is a characteristic example, exhibiting some of the lowest retail prices in Europe for small and medium-sized car categories, while the reverse applies to the more luxurious cars with big engines. According to the figures made available by the Commission, a Volkswagen Golf is sold in Greece for 14,525 euros, one of the lowest prices for this model in Europe, although the price difference is small in comparison with the other European countries. On the other hand, the BMW X5 model is sold in Greece for 61,051 euros and in most other European Union countries for about 45,000 euros – despite the fact that the producer price in Greece for this model is 37,000 euros, about 2,000 euros lower than for other member countries. Finally, a Mercedes S350 sells in Greece at a price of 103,735 euros compared with only 65,000 to 70,000 euros in most of the other countries in the European Union.