Changes Reduction In Uk Car Prices example essay topic

Normal TannaDissertation 11.10. 2000 Tutor: D Dovey, TUESDAY 12 pm. Question How do the changes / reduction in UK car prices affect the and customer? Research will be collected via the internet i.e. prices & product information. Internet car buying has also changed the traditional way that an individual would procure a brand new motor vehicle. Other sources such as the AA, DVLA and TOP GEAR (BBC television program), will be contacted.

The DVLA in Swansea may have interesting information on trends with have been influenced in the price restructuring. Interviews with the director and owner of a Ford garage will also help to see how the changes are effecting the industry. This will help to establish how reduced UK prices are coming in line with main land Europe. Aspects such as recent changes in vehicle equipment levels, and general quality will also be of interest as the manufacturer has to tighten his profit margins.

Lots of garages will be contacts this shall help establish which have reduced prices and offer deals to intis e customers. General trends will be apparent, but each dealer is a franchise so a particular Dealer i.e. BMW may be offering different packages around the country, even though list prices remain transparent. Government Legislation has also been a crucial factor behind the reduction In Inflated UK prices. This highly topical subject has also been investigated and highlighted Recently in the media. Monday, May 10, 1999 Published at 12: 18 GMT 13: 18 UK Business: The Company File Ford sparks price war Pressure to reduce the price of new cars is increasing Car-buyers in the UK could benefit from a price war a sone of the biggest name brands, Ford, signals its intent to compete more fiercely.

Ford is reportedly giving UK dealers a discount of lb 3,000 on its Mondeo models, as long as they can sell at least 10 cars a month. Some industry experts believe this could be the start of price war as manufacturers such as Daewoo and Hyundai shape up for a renewed onslaught on the UK car market. The pressure to reduce prices has been mounting from various sources during the past year. The Competition Commission is currently investigating why car prices in the UK are among the highest in Europe and there has been fierce criticism from an all-party select committee of MPs over the same issue. Motoring journalist Mike Rutherford says that price reductions by Ford - the UK's market leader - are long overdue. He said: 'I would much rather see that lb 3,000 discount applying not to the dealer but to the end consumer because quite simply consumers in the UK a repaying far, far too much for their motor cars and in particular their Ford motorcars.

' Ford are making what I can only describe as obscene profits on a worldwide scale and they can afford to drop their prices and they should drop their prices. ' However the introduction of discounts may also be apre-emotive strike by Ford designed to stave off the threat of growing competition from Asia. Seoul Motor Show opens its doors in South Korea on Monday, and the likes of Hyundai and Daewoo will be showing off their new models, many on their way to Britain. In just four years Daewoo and Hyundai have become household names and are becoming serious challengers in the car sales table. European consumers are being increasingly tempted by the often cheaper Korean cars which come with extras like air-conditioning and three years service thrown in. Asian ambition The BBC's South Korea correspondent Andrew Wood said: 'They are really looking towards European markets and they see those as being the big hope for South Korea.

' Hyundai for example wants to become a top 10 car manufacturer by the year 2002 and it wants to achieve that mostly through exports. ' Mike Rutherford, also agrees that the Korean threat is avery real one for UK car manufacturers. He said: 'In the week that Was in South Korea, three new cars were launched. ' When was the last time that Britain plc launched three new cars?

That is even before the Seoul motor show when we will witness the unveiling of maybe a dozen new cars. ' They are catching up fast and they are out to do what the Japanese did in Britain 10 or 20 years ago. ' Because there are no import quotas, South Korea can sell as many models as it likes in the UK. The only thing stopping it from making major strides into the market is the customer appeal of the models. Professor Karel Williams of Manchester University said:' What they are pushing is entry-level cars. ' They are cheap but there is not a lot of volume here and they are going to be marginal players unless they can escape from this category and move into this mainstream and sell against Volkswagen, Ford and all the rest.

' Rivalry hots up This year South Korea is looking to produce a total of three million cars - with two million earmarked for export. The European Automobile Manufacturing Association is so concerned that it is taking up the matter with the European Commission. A spokesman said: 'On the one hand, the Koreans exported to Europe 405,000 cars last year - we the Europeans only sold somewhere between 700 or 800 cars. ' That is less than a 1,000 cars and that is ridiculous. They have to open their markets. ' Mercedes throws down gauntlet with price cut German car giant Mercedes-Benz has thrown down a challenge to its competitors by reducing UK prices by up to 20%.

The new prices will take effect from September 1 and will cut the cost of a an S-class 500 by about lb 14,600. The Mercedes move follows that of Lexus (GB) which earlier announced a 10% cut in prices - also from the beginning of next month. Mercedes-Benz said it was bringing prices in Britain in line with those in mainland Europe and the savings would be available for customers buying from franchised Mercedes dealerships in the UK. The cuts, which will average 9%, mean an A 140 Classic goes down from lb 14,490 to lb 12,790 - the first time a new Mercedes has cost less than lb 13,000. The price falls by the two companies follow publication earlier this year of a long-awaited Competition Commission report which confirmed that UK consumers were paying far more for new models than their European counterparts. Trade and Industry Secretary Stephen Byers has since introduced measures to ensure lower prices in the UK.

' Our initiative effectively puts our prices on a par with Europe although many of our customers have been getting close to these prices anyway by negotiating on the sale price,' said Mercedes-Benz UK passenger cars director Dermot Kelly. He went on: 'We are selling record numbers of cars in Britain and we have always said that we would be competitive and give our customers great value for money. ' New car prices have been edging down in recent months and these reductions from Mercedes and Lexus will coincide with the arrival of the new X-registration plates on September 1. Prescott promotes green motoringmeasuresThe Government has announced lb 69 million package of measures to cut the cost of motoring and clean up the environment. John Prescott says the money will help promote cleaner, greener vehicles that will cut the amount of greenhouse gases the UK puts into the atmosphere. The extra cash is part of the Government's response to the final report of the Cleaner Vehicles Taskforce, set up three years ago to encourage car manufacturers to make quieter and more energy efficient vehicles.

The Deputy Prime Minister said: 'This demonstrates the Government's commitment to tackling the impact of vehicles on air quality and climate change by promoting the best available clean fuels and technologies. ' Motorists can play their part by choosing cleaner, fuel efficient vehicles. This is not only good for the environment, it can save drivers money on fuel too. ' World leaders are gathering in the Netherlands for the final hard bargaining session of a climate change conference -the follow-up to Kyoto in 1997 when nations made a legally binding agreement to reduce carbon dioxide emissions by 5.2%. The UK is on course to reduce greenhouse gases by far more than this target and last week environment minister Michael Meac her says the country could reduce emissions by 23% below 1990 levels in 2010. This is almost double the legally binding target for the UK agreed in Japan.

But America, as the world biggest polluter, is under pressure to act and Mr Prescott says that without the US on board 'I don't think there is much of a solution. ' One of the ways governments can reduce the amount of carbon dioxide in the atmosphere is to plant forests and crops which act as 'sinks', absorbing the gas and storing it. The problem comes when the trees and plants die and the carbon is released back to the atmosphere. This method of taking up carbon dioxide is included in the Kyoto protocol but there is genuine concern in The Hague that the US is relying too heavily on 'sinks' to meet its carbon dioxide reductions. Last updated: 11: 47 Monday 20th November 2000. Brussels move may cut new carpricesThe price of new cars in the UK could eventually be cut by lb 500.

The reduction will come if the European Commission decides to scrap the the much-criticised selective dealer system of selling new cars. The end of the system moved a significant step closer when the EC adopted a report which said that consumers did not seem to be benefiting from the scheme. This is inline with the views of UK consumers who have constantly attacked the franchised dealer network system which, they claim, has led to expensive cars and a lack of choice. The franchised dealer network system is, strictly speaking, against EC rules but is allowed under what is known as a block exemption regime. The EC is due to make a final decision next year on whether the block exemption should continue after September 2002. The report says the block exemption had not achieved part of the aims stated by the commission in 1995 when it renewed the permission for the UK and other countries to carry on with the selective distribution networks for car sales.

Although still effectively a consultation document, the report may well prompt the EC to end the block exemption. Jamar. com - an internet site for insurance company Direct Line - says that the block exemption system had increased the total costs of UK cars by up to lb 1 billion. ' We estimate that UK cars prices could come down by around lb 500 per car if current distribution rules were relaxed,' said Direct Line's e-commerce managing director Oliver Pill. The European Automobile Manufacturers Association says that the report had drawn heavily on the situation in the UK which was 'not representative of the EU'.

The association also disagreed with the report's view that independent garages could provide compete and comprehensive servicing of cars. The association said the report had not sufficiently recognised 'that the increasingly close co-operation between suppliers, manufacturers and dealers results in high efficiencies'. Wednesday November 15, 8: 01 PM Carmakers face dealership probe European trade watchdogs who have condemned huge gaps in car prices throughout Europe are to probe the link between manufacturers and dealers. The news follows pressure from the UK competition authorities to lower the prices of cars in Britain.

The European Commission has announced a fresh round of consultation, and will examine expert witnesses in February, after adopting a report revealing large discrepancies in car prices between different EU states. The move heralds reform in 2002 of an EC agreement which has allowed motor manufacturers to retain exclusive dealership networks. ' Consumers in particular do not seem to derive from this distribution system the fair share of the benefits of the creation of a European single market,' the EC said in a statement on Wednesday. The commission will next year publish proposals for reforming the sales deal, which has 'not achieved its aims', the statement said. Tough talks Motor manufacturers, which believe the link between factory and dealer is needed to promote technical and sales excellence, were on Wednesday preparing for tough negotiations with the EC. ' What today's announcement really marks is the beginning of the next round of talks,' a spokesman for the UK " society of Motor Manufacturers and Traders told BBC News Online.

' We are still a way off the publication of the proposals. We will be strongly putting our case. ' The companies argue that the dealer networks are essential to provide after-sales customer service. Price gap In the report, first presented in July, EC investigators found differences of up to one third in the prices charged for the same car in different EU states. Britons were, in euro terms, paying more than a quarter more for cars such as the Volkswagen Golf, Ford Mondeo and Opel (Vauxhall) Astra than motorists in the state where the model was cheapest. Yet the pound's appreciation against the euro should have cut costs of imported cars and parts, Mario Monti, the Competition Commissioner, said.

' Mario Monti is wondering why the competitive pressure on this market... has not been sufficient so far to promote substantial price cuts in response to the currency development,' the commission said in July. Mr Monti stressed his conviction to investigating 'possible restrictive practices' hindering UK motorists from buying cars elsewhere in the EU at Continental rates. Discounts But manufacturers, also under pressure from the UK government and consumer groups, have over the last two months slashed hundreds of pounds from the prices of many new cars. Ford has cut 13% off the recommended UK retail price of new models, with discounts announced by Vauxhall last month reducing the price of an Astra 1.6 by about lb 1,500. Mercedes in August cut UK prices by up to 20%.

And new services have sprung up to help UK consumers buy cars in Europe. Thursday November 9, 4: 05 PM Price Winners And Losers British car buyers are snubbing manufacturers offering discounts in favour of those who have taken direct action and reduced their list prices, according to the latest Car Price Check Report (web) from Auto hit. In the month where Ford regained some its lost market share after slashing list prices by up to 13 per cent, Renault, Fiat and Peugeot have seen a significant fall in consumer interest during the past month as they continue to hold onto their existing price structures. As widely predicted, now that some manufacturers have slashed their official list prices, dealer margins and the willingness to offer 'further' discounts, have been notably squeezed.

Car Price Check (web) is an impartial online navigator of new car prices from all the major Internet motor retailers and UK dealers. gist rations On The Up Registrations by private buyers have soared by over 14 per cent this October, with total registrations rising 2.6 per cent, reflecting renewed consumer confidence in the UK new car market. Research from the recent British International Motor Show has revealed that nearly half of the visitors intend to buy a new car over the next twelve months. 'As well as producing new, improved models, manufacturers are reducing list prices, providing longer warranties and better servicing packages - there has never been a better time to buy a new car in Britain,' comments Christopher Mcgowan, SMMT Chief Executive. Tuesday November 7, 11: 31 AM New car sales surge New car registrations in the UK have risen sharply in response to price cutting by manufacturers. A 14.1% rise in October followed big list-price reductions by major firms such as Ford and Vauxhall. Overall, the number of new cars bought in October total led 153,541, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

This was a 2.6% increase on a year earlier. ' As well as producing new, improved models, manufacturers are reducing list prices and providing longer warranties and better servicing packages. ' There has never been a better time to buy a new car in Britain,' said SMMT chief executive ChristopherMacgowan. However, year to date registrations were 0.9% down on the previous year at 1,951,296 units.

Rover struggles While a number of big companies - including Peugeot, Renault and Volkswagen - recorded big sales increases compared with October 1999, Rover had another bad month. The West Midlands company sold just 5,613 cars in October, compared with 7,678 the previous year. Its market share was 3.66% - down from 5.13% a year earlier. This was roughly in line with September figures, when Rover had a 3.68% share of the market, compared with 6.04% in September 1999..