BUSINESS NEWS
Vehicles more expensive in SA
Posted Mon, 22 May 2006
The prices of imported vehicles in South Africa are on average 18 percent higher than in European countries, Business Report said on Monday.
It cited a newly-released Competition Commission report as saying locally-produced vehicles also cost eight percent more.
The report emanated from the commission's investigation into excessive pricing in the South African new vehicle market.
The document, which has been submitted to the mid-term review of the motor industry development programme (MIDP), has not been publicly released before.
It found in its sample of six vehicles studied, that South African vehicle prices were on average 14 percent higher than in European countries.
Two vehicles in the sample were cheaper in South Africa than in a number of EU
countries.
The BMW 318i was five percent more expensive in Germany, two percent more pricey in Ireland and one percent more in the UK.
The Mercedes Benz C180 Kompressor was
two percent more expensive in Germany, Belgium and Denmark but nine percent cheaper in the UK than in South Africa.
Other vehicles in the sample were the Audi A3, which ranged from ten percent to 25 percent more expensive in SA than EU countries; the BMW X5, which was between 12 percent and 18 percent more expensive; the Land Rover Freelander, which was between nine percent and 14 percent more expensive; and the Volkswagen Golf 5, which was between ten percent and 42 percent more expensive.
The commission's view was that the MIDP had certainly benefited the motor industry by boosting output, exports and employment, but it was "not clear that consumers have received their fair share of the benefits".
Vehicle affordability, a stated objective of the MIDP, had not been achieved.
It seemed that the nominal price of both entry-level and benchmarked vehicles had remained constant since 2004, but there had been steep increases in car prices between 2001
and 2003.
Following those steep rises, and despite the subsequent levelling of prices, South African car prices are still on average 14 percent above prices in other countries.
"This estimate was arrived at after making the necessary adjustments for differences in vehicle specifications, tax rates, tariff rates, transport costs, motor plans, etc, for the particular sample of cars and countries used," says the report.
Sapa
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