ECONOMY

Greece’s low car prices

Ex-factory prices of private cars in Greece are among the lowest in the European Union and fell further between May 2005 and May 2006, according to the European Commission’s biannual report on competition in the sector, released in Brussels yesterday. Both ex-factory and after-tax prices fell 2.4 percent in this period, while the general consumer price index rose 3.3 percent. At the same time, car prices rose by an average of 1.2 percent in the eurozone and 0.8 percent in the rest of the EU. To be sure, Greece’s after-tax price advantage does not apply to midsized and large cars. The reason is that car makers aim for an average profit margin in Europe as a whole and adjust their prices according to a country’s purchasing power per capita and taxation levels. Greece is at the lower end of the scale regarding purchasing power and has relatively high taxation on cars. For instance, Greek prices, both ex-factory and after-tax, of the Ford Fiesta, the Fiat Stilo and Punto, as well as the Nissan Almera are the lowest in Europe. In contrast, the BMW 740i and 523i, the Mercedes S350 and E220, and the Audi A8, also have among the lowest ex-factory prices but after-tax prices are up to 40 percent higher than those of Luxembourg, the most expensive country in Europe for cars. A standard that has remained unchanged since the Commission began publishing such data is that Greece has the lowest after-tax price for the 75PS, five-door Golf in all Europe. The ex-factory prices on which the comparisons were made, which do not include accessories or discounts, were those issued by the car makers themselves for May 1, 2006.