FLEET discounts were restricted by 'a disgraceful' price-fixing cartel operated by Volvo dealers, it has emerged following a year-long investigation by the Office of Fair Trading. Volvo Car UK has now admitted supporting secret agreements to fix its UK car prices which saw dealers collude with the manufacturer not to offer discounts beyond fixed levels to both fleet and private customers. It is believed these restricted fleet buyers to a 5% discount.

The manufacturer has now signed an agreement giving assurances to the Director General of Fair Trading, John Bridgeman, that it will not support price-fixing cartels operated by its dealers in the future. The OFT says that, if dealers attempted to offer bigger discounts, they ran the risk of being penalised and this could include losing their franchise. Bridgeman said: 'This is a disgraceful case. A major, and well respected, car manufacturer colluded with dealers who were fixing prices, by penalising distributors who didn't tow the line. This demonstrates a blatant disregard for UK law and an indifference to the exploitation of customers.

Volvo denies that it orchestrated the price fixing and insists it was carried out by a number of dealers in the south of England acting on their own. The manufacturer has, however, agreed to all the OFT's demands .Gerry Keaney, Volvo Car UK's managing director, said: 'We have worked closely with the OFT, who accepted that these instances were limited in both time and scope. Now we have a tough new disciplinary code and improved training. Any breach of the rules will not be tolerated.'