01 September 1998

SUPERMARKET GIANT Tesco plans to sell cut-price cars within the next two years, offering buyers savings of up to 30% and bringing UK prices into line with those in mainland Europe. The showrooms will be on prime retail sites near to its stores across the UK, although it is not yet clear whether Tesco will sell the cars via its own sales teams or offer retail space to manufacturers on a franchise basis. The supermarketer has been publicly campaigning against price-fixing of other goods, such as designer-label clothing, and is expected to adopt a similar stance on car prices. Meanwhile, the Office of Fair Trading has indicated that the Monopolies and Mergers Commission is likely to investigate car dealership networks, widely believed to be controlled by the manufacturers who exert pressure to keep prices artificially high.