Car prices in Britain are still too high and the consumer watchdog should be called in to investigate, an all-party committee of MPs said yesterday.
In its latest report on the automotive industry, the House of Commons trade and industry committee said that discounts offered to even the largest dealers are still lower than those available to fleet buyers.
If big dealers got the same discounts as fleet buyers, their margins would increase, allowing more scope for cut-price deals to consumers who would therefore benefit from consolidation in the retail distribution market.
The committee also believes the Office of Fair Trading should investigate the conditions imposed on those wishing to become authorised repairers. "We see no reason why consumers should suffer restrictive practices in the servicing and repair of their cars."
The committee added that Britain could still see plant closures despite having some of the most productive vehicle assembly capacity in Europe.
While it ruled out a widespread shift in production from the UK to Asia, it said those who gave evidence were less optimistic about the prospects of Britain fighting off competition from elsewhere in Europe, particularly from central and eastern Europe. "With domestic production so reliant on exports and domestic sales so dominated by imports the implications for the balance of payments could be serious."
The committee also said that it had been concerned by press reports calling into question the prospects for continued car production at MG Rover's Longbridge plant following its acquisition by Phoenix Venture Holdings.
"Whilst it seems that the PVH directors have ensured they are generously remunerated for their involvement in MG Rover and associated companies, we found nothing to call into question their commitment to continued car production, both at Longbridge and elsewhere. It is important that PVH finds ways of transparently promoting good governance, to dispel doubts about the way its assets could be used in the future and to underline that sustainable car production at Longbridge remains its core focus."
