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British new car prices down 1.3 pc

LONDON: Prices of new cars in the UK are falling faster than at any time in the past seven months, according to a report published on Saturday.

Prices are currently 1.3 percent lower than in January a year ago, the CAP index of car prices showed.

The reduction over the past 12 months showed that prices at the start of 2000 were falling at a faster rate than at any time since they began to decline last summer, said CAP Motor Research, a private body that looks at the automobile industry.

British car buyers believe prices are higher at home than in many other European countries. After years of rising car prices, they have begun to stay away from the showrooms in the hope that car companies in Britain will be forced to cut prices further.

Britain's anti-monopolies watchdog, the Competition Commission, is concluding a detailed review of the cost of new cars and investigating why the price of many models is higher than in other European Union countries.

CAP said it believed the widely predicted harmonisation of list prices in Europe - which could mean cuts of up to 30 percent in Britain - remained extremely unlikely.

"Gentle reductions and improvements in equipment levels will continue," said CAP chief economist Mark Cowling.

He said car firms had not reduced prices to match cuts announced by Mitsubishi 7211.t at the end of last year.-Reuters