DRAMATIC new car price cuts have been ruled out by the managing director of a UK manufacturer who instead claims car prices in other European markets could rise. Such a move would have a significant impact on the number of companies importing cut price cars from overseas and on the surge in the number of companies offering cheap cars over the internet such as P&O Stena and Virgin.

With the Competition Commission's report into the UK car industry, including car pricing, due to be published within the next month and claims that business in the UK is hard as private buyers boycott showrooms in anticipation of price cuts, Tim Tozer, managing director of Mazda UK says: 'Price cuts will not happen.'

Speaking as poor February new car sales figures were published - due to a combination of the showroom boycott and this month's launch of the W-plate - Tozer said: 'The market is being sustained by heavily-subsidised fleet business. But price cuts will not happen across the board because of the impact that will have on residual values for manufacturers, leasing and rental companies and fleets.'

Instead Tozer said manufacturers would 'put value into products' as and when new models were launched or facelifted in the UK. And with the European Commission looking for price harmonisation, he suggested that the controversially low pre-tax new car list prices in high car tax countries such as Denmark, Finland and Ireland could be increased.