50 years ago today - September 1971
As the UK prepared to join the European Common Market, CAR took aim at the rip-off car prices that were about to be exposed.
‘There is precious little prospect of any sweeping price cuts’
50 years ago today — Looking back without hindsight
In September 1971, the UK stood poised to join the European Common Market and with it, move away from an era of protectionism. ‘Successive British governments have done their best to stop you buying foreign by imposing fairly stiff import duties,’ noted Ian Webb in CAR’s analysis of what the move might mean for buyers.
Although import tax was due to fall from 13 per cent to 11, there was still the spectre of purchase tax. ‘PT at the moment is 36.66 percent of the price of the car, be it British or foreign,’ said Webb. ‘The catch for the foreigners is that it’s 36.66 percent of the price plus the import duty – a tax on a tax.’
It also appeared that importers were profiting wildly, with nebulous extra expenses lumped into the price. Lamborghinis cost around 68 per cent more in the UK than in the Common Market, with transport costs given as the main reason why a Miura S here cost £9152, rather than £5433 in Italy. The average Mercedes was 51 per cent more expensive once it reached UK shores, with entry-level cars even more heavily marked-up than luxury models.
‘Just how much importers make per car is not something they like to talk about, but a medium-sized firm like the BMW concessionaire reckons that the average dealer can make up to £200 per unit,’ wrote Webb. And these were often arbitrary costs; ‘Another middle-sized importer puts a straight £100 on each car to cover advertising expenses.’ This reliance on networks of profiteering importers affected aftersales too, as Webb explained. ‘One Italian importer happily admitted to us that the only place in Britain where the delicate innards of his cars could be maintained properly was London. For say, a Glaswegian owner, that meant pitifully few miles before the long trek south was due again.’
Although things had improved ahead of Common Market membership, 60 per cent of imported cars in 1971 were still dealt with by concessionaires rather than company-owned dealers. Others, by contrast, would use the cost of right-hand drive conversion, or the requirement for seatbelts, as a reason for yet more surcharges.
This was bolstering the British car industry. ‘BLMC sold more Maxis in the first quarter of this year (11,809) than the total – that is, all models – VW sales in the same period. VW are the biggest selling importers,’ Webb wrote. But it was all about to change. The winners, he reasoned, would be economy car buyers, while BMW and Mercedes dealers would be unlikely to offer a corresponding price drop. ‘They have always been aimed at prestige buyers. Better to buy their shares and get a slice of the action!’