Car price differentials in the european union. EU Commission versus Volkswagen: New Evidence on Price Differentiation in the European Car Market on JSTOR 2022-10-27

The European Union is a diverse and complex economic region, comprising 27 member states with varying levels of wealth and development. As a result, there are significant differences in the prices of goods and services across the EU, including the prices of cars.

One of the main factors contributing to car price differentials in the EU is the cost of living in each member state. Countries with higher costs of living, such as Sweden, Denmark, and Finland, tend to have higher car prices than countries with lower costs of living, such as Romania, Bulgaria, and Poland. This is because the cost of production, including labor, materials, and taxes, is typically higher in countries with higher costs of living.

Another important factor is the level of competition in the car market. Countries with more competitive markets, where there are many different manufacturers and dealers competing for customers, tend to have lower car prices than countries with less competition. This is because competition drives down prices and encourages manufacturers to offer more competitive pricing in order to attract customers.

In addition to these factors, car prices in the EU can also be influenced by other economic and regulatory factors, such as the level of government intervention in the car market, the strength of the local currency, and the level of taxes and duties applied to car imports and exports.

Overall, the price of cars in the EU is influenced by a complex interplay of economic, regulatory, and cultural factors. While there are certainly differences in car prices across the EU, these differences are not necessarily reflective of the overall wealth or development of a particular member state, and can vary significantly depending on the specific market conditions and characteristics of each country.