Diesel versus petrol

Car prices in Europe are shooting up much faster than last year. What's more, Europeans have switched from petrol-fuelled cars to diesel ones, boosting the sales of the latter. Although the price of diesel cars grew by 4.5 percent, their sales are currently 13 percent bigger than in 2004. At the same time, cars fueled with petrol now cost 3.4 percent more than last year, and their sales have fallen by seven percent.

"Today diesel cars constitute a half of all cars being sold in Europe, and the tendency is very unlikely to slow down," said the head of automotive department at PricewaterhouseCoopers in Poland, David Green.

Diesels appear to be less appealing for Poles.  Poland, together with Greece, recorded a drop in diesel sales.  Between June 2004 and June 2005 sales of cars in general dropped by 23.2 percent. However, the most striking sales decrease was recorded for small cars. The price of small cars on the retail market grew by 1.5 percent in the same period.

The prices of luxury and high-class cars in Poland are falling, but may be related to currency rate fluctuations. Most cars in this class are priced in euro and a stronger złoty means a significant decrease in these cars' prices.

"The increase in new cars' prices has been hampered by smaller demand. Poles, who still are not as affluent as citizens of Western Europe, more often choose used cars, which are much cheaper. On the one hand it lowers the prices and sales of new cars, making the dealers and producers dissatisfied. On the other hand, the whole automotive market is growing," says Rafał Krawczyk, manager in the automotive team at PricewaterehouseCoopers.