A PAN-European levelling out of new car prices and specification as a result of the introduction of the Euro will impact most on fleets. Once all European countries, including the UK, have adopted the Euro there will be widespread price convergence with new car prices falling compared with current 'high' UK prices.

As a consequence fleet discount levels will be eroded because, according to Peugeot fleet and leasing director John Taylor: 'There will not be the margins to give away. List prices in the UK will fall to the levels they are in Europe and therefore price convergence will be most painful for the fleet market.'

But, he stressed: 'The process of price equalisation will take a long time and it will be a long time before there is an equalisation of specification and discounts across Europe.' And, Taylor predicted, that even with some countries adopting the Euro from January 1, 1999 there would be no impact on new car pricing in the UK until the Euro replaced Sterling.