The Competition Commission stirred up another hornet's nest around the motor industry when it announced that cars in South Africa were "priced 14 per cent higher on average than the equivalent models in European countries". It was claimed that imported models cost 18 per cent more and locally produced cars were priced 8 per cent higher than the same model in Europe.

This information on the commission's investigation into excessive pricing in the South African new vehicle market formed part of a submission to the mid-term review committee of the Motor Industry Development Programme (MIDP). However, the commission reported that it could not act against any of the motor companies in this regard as none of them could be defined as "dominant" in terms of the Competition Act. The act defines market dominance as a market share of at least 35 per cent , while the market leader, Toyota, currently has a share in the region of 23 per cent .

The commission also alleged that the MIDP had "failed consumers". It acknowledged that the MIDP had enhanced exports and increased employment, but claimed that the programme's vehicle affordability objective was not being met.

The National Association of Automobile Manufacturers of South Africa (Naamsa) has slated the report as being flawed. Naamsa said it had reservations about the methodology, assumptions and sample size used by the commission in their comparative pricing study.

The organisation also said that the commission's analysis assumed that all motor manufacturers did not pay any duty, which was incorrect, as a number paid "significant duties".

Naamsa said the report did not make any allowance for the relative sizes of the EU and South African markets and the impact of this on costs and prices. They had also not benchmarked the products of impendent importers, had not compared South Africa with other developing countries or taken into account the historical exchange rates and inflation differentials between South Africa and the EU.

A prominent economist questioned the hypothesis that cars should cost the same in different parts of the world: " Houses don't. Hamburgers don't. So why should cars?" He also questioned the validity of a survey that compared only 0,6 per cent of the vehicles on the local market, where there are currently more than 1 000 models.

There were also queries about the fact that the models used in the comparison were from the mid-size and luxury segments, not the affordable end of the market, and all from European manufacturers. (The cars compared were the BMW 318i, Mercedes Benz C180 Kompressor, Audi A3, BMW X5, Land Rover Freelander and the VW Golf 5).