The European Commission has published its latest car price report (press release here). The data are six months old, relating to the start of this year.
It seems a long time since this information was anxiously awaited, when car price differences and the (misguided, in my view) attempt to prevent them drove the whole policy underlying the block exemption. Now of course the Commission is able to say that the market for new vehicles is competitive and doesn't need the close attention of which a sectoral block exemption was symptomatic. Curiously, though, we still have special rules and extensive quasi-legal guidelines which rather indicate that the motor sector remains a special case - just special in a different way, I guess. The Commission is certainly not as excited about the price differentials as it used to be, although in a true single market perhaps it should zealously stamp out any differentials ... And some of them still look pretty big to me.
One major explanation for the ending of price differentials has been the advent of the Euro, and the Commission's report distinguishes the situation in the Eurozone from that in the non-Eurozone countries. What if the Euro fails to survive its present difficulties? Perhaps it will be back to the good old days of parallel imports - and sectoral block exemptions.
Widely differing tax treatment of car purchases also made a large contribution to the problem of price differentials, and that remains: VAT rates are far from harmonised. But even more importantly, spending power is more uneven than ever - during the last few years, in which price differentials have closed, the EU has expanded considerably, bringing in eastern European countries where spending power must be a great deal less than in some other Member States. The price might be the same in Germany and Bulgaria
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