Following recent moves by Ford and MG Rover, Vauxhall plans to cut prices by up to 12%. The most popular car in its range, the Astra, will fall 9% in price.

The car firm also announced lower prices on its website, which launches in November, claiming to be the world’s first car manufacturer offeringits entire range via the web.

The move will not help the finances of parent company General Motors, which has seen a $181 million loss in Europe in the last three months.

“These results reinforce the need to step up our efforts to eliminate waste and lower costs”, said GM ceo Richard Wagoner, “The industry continues to venture into new territory, near-record demand mixed with unprecedented price pressures and intensely strong competition on all fronts”.

Prices in the UK have fallen 15% over the last year, ending Britain's nickname in the US as ‘Treasure Island’ in recognition of the high price tickets hung on new cars.

News source: The Times (London)