ECONOMY

Car prices won’t drop this fall

BRUSSELS – Greek consumers should expect minimal to no benefits in car prices this coming fall in the European Union, according to the comparative table of prices presented by the European Commission yesterday. The document reveals that the two main factors determining car prices in Greece are very low manufacturers’ suggested «factory» prices and taxation, which is already low for small models and often shockingly high for large models. The Commission shows that Greece, Spain, Denmark and Finland have the lowest factory prices. This, in some cases, is due to manufacturers’ efforts to offset the impact of very high taxation and, in others, to the low cost-of-living standards. In Greece, it is due to both factors. Taxation in Greece shows a particular characteristic: a big difference between the luxury tax on small and large models. The low tax burden on small models contributes to the lowest retail prices in the EU, while the high taxation on large models makes their final price especially high relative to elsewhere in Europe. A Mercedes model E-220 or S-320, for instance, costs 50 percent more in Greece than in Germany – generally the most expensive car market in the eurozone – or in Belgium. The factory price of an Audi A8 in Greece is the lowest in the eurozone but its final retail price the highest: from a «suggested» factory price of 37,950 euros it rises to 69,334 euros with tax. By contrast, the final prices of small models such as the Peugeot 106, Citroen Xsara or Golf 75 are the lowest in Europe. On the face of it, the convergence of factory prices, which the European Commission expects, can only minimally benefit the Greek consumer as the factory prices one pays are already among the lowest in Europe, while taxation is not affected at all by the new comparative pricing in the car market.