CAR makers have rebutted allegations of price fixing in the UK by consumer magazine Which? Volvo and Fiat were both accused of contravening European Union guidelines by forcing customers to pay artificially high prices after an undercover reporter attempted to get discounts from dealerships.

The allegations against Fiat were based upon all its dealerships inside the M25 being owned by Pendragon - deemed by Which? to be bad for competition - even though the investigator actually discovered that Fiat's London branches were prepared to undercut one another for a sale.

'The allegation by Which? that Fiat dealers inside the M25 are offering the same models at identical prices, thereby discouraging competition and price cuts, is fundamentally untrue,' said a Fiat spokesman. 'There is no restrictive pricing covenant in existence here. It is, however, true that certain Fiat and Alfa Romeo models are in short supply as a result of demand both here and throughout Europe. It would not, therefore, be surprising if these models were not discounted.'

Which? was also dismayed to find it virtually impossible to secure any discount on a Volvo S40 after contacting a dozen dealers for a quote. After Volvo's customer helpline told the magazine the company wasn't in the business of allowing dealers to discount, Which? interpreted the practice as price-fixing and claimed it was a clear breach of European law on car distribution.