Cars became more expensive, more equipped. Manufacturers pass on rising costs to prices

---

Virtually all car manufacturers have risen in price in the first quarter of this year. This follows from the regular price index of the consulting company EY. Cars in the top variants are slightly more expensive than models in the basic equipment. The increase in prices is due to higher costs for manufacturers associated primarily with electromobility.

Prices of new cars on the Czech market increased by an average of 0.8 percent in the first quarter compared to the last quarter of last year. The increase is due to the widespread rise in prices for the Volkswagen, Škoda, and Mercedes-Benz brands. Vehicles in the top variants became more expensive by 1.1 percent, basic equipment by 0.7 percent. This follows from EY's regular price index.

In addition, the price index has been affected by the growing supply of plug-in hybrids. This type of vehicle helps carmakers reduce overall emissions, but their production entails higher costs, which carmakers further reflect in end-user prices. whose prices rose by an average of 1.9 percent.

Plug-in hybrid vehicles were 3.5 percent more expensive on average, despite expanding the range of models available with this drive by 21 percent. Diesel and gasoline cars were about half a percent more expensive.

For example, the Škoda Octavia, VW Passat, Škoda Karoq, VW Tiguan, Škoda Superb, or Mercedes GLE models were sold at higher prices. For example, the VW Passat became more expensive in all motorizations by an average of more than CZK 16,000.

Small cars with basic equipment recorded a price increase of 1.5 percent. Maximum equipment also became more expensive by 0.4 percent. There has been no change in the mini cars. Prices for lower-middle-class cars rose by 0.7 percent in the basic version and by 0.3 percent in the top equipment. Middle-class cars rose by 2.5 percent and 1.5 percent, respectively. VW Passat in particular had a share in the growth of middle-class prices.

The category of upper-middle-class cars rose by an average of 1.2 and 2.2 percent compared to the previous period. For example, the BMW 5 Series jumped by more than CZK 30,000 in most engines. Even the category of SUVs and crossovers did not avoid rising prices. The price of basic equipment rose by 0.8 percent and by the maximum by one percent.

The trend of the last almost four years that we have been preparing the EY price index clearly shows a general increase in car prices in both basic and top equipment, further price increases can be expected with the gradual electrification of standard combustion units, the situation is not facilitated by lower production capacities caused by a lack of chips or the current pandemic situation.

Sales of new passenger cars in the Czech Republic in the four months of this year rose by 12.6 percent year on year to 68,510 cars. However, compared to 2019, which was not affected by a coronavirus, it is 17 percent less.