BRUSSELS - Harmonization of car prices across Europe could take another 20 years, in spite of the launch of the euro on 1 January, say leading auto industry lobbyists.
ACEA, the European automakers' association, estimates that EU governments now collect $224 billion a year from motor vehicle taxes, fees and insurance.
And they are in no mood to hand over responsibility for car taxes to a central European authority.
One Brussels lobbyist working for a European automaker said: 'Car tax will be the last tax to be harmonized, because it's such a big earner for national governments. It will take 20 years for prices to even out.'
EU car tax rates range from 15 percent in Germany to more than 200 percent in Denmark.
Germany's recent call to harmonize corporate and individual taxes across the continent was strongly resisted by politicians from many EU countries, who said they would not give up the right to set their own tax polices without a major struggle.
The protests were loudest in the UK, where car taxes are among the lowest and retail prices are the highest in Europe. The UK government levies only a value-added tax of 17.5 percent and an annual car tax of £150 ($248) on new vehicles.
Marc Greven, a top lobbyist at ACEA, said: 'Europe has never got very far with harmonizing taxes. The closest agreement we have seen is member states setting a minimum 15 percent value-added tax. It's an illusion to think that Europe will automatically get tax harmonization.'
Auto industry chiefs repeatedly call for harmonization of vehicle taxes, arguing the differing rates are one of the major reasons car prices vary by up to 60 percent across Europe.
Bernd Pischetsrieder, chairman of the BMW Group and the current president of ACEA, and his immediate predecessor Louis Schweitzer, chairman of Renault, have both made public calls to end disparities during their one-year reigns as head of the European automotive makers' group.
ACEA's Greven says there are other areas of taxation - such as corporate tax - that will be given a higher priority for harmonization across the EU.
But even that would require a major fight. Any change in taxes, under current EU rules, would require a unanimous vote - not the simple majority needed to pass other legislation.
'There isn't much the industry can do at the European level. The most we can do is continue to raise the issue of contrasting tax levels when necessary; otherwise we get blamed for price differences,' said Greven.
Denmark has the highest automotive taxes. They're so high that the European Commission excludes it and Greece - whose taxes go as high as 75 percent -from the twice-yearly study of car prices in the EU. The other member country not included is Luxemburg because of the small size of its market.
The UK, Germany and Luxemburg have the three lowest car taxes. In Germany, a 16 percent VAT and DM50 ($30) registration fee are charged. Luxemburg charges a 15 percent VAT and $32 to register the car.
In Denmark, taxes represent 198 percent of the net price of a 1.5-liter engine car and 213 percent of a 2.0-liter unit, according to ACEA.
Denmark also taxes company cars at the rate of 23 percent of the car's value if the car is under 3 years old. Older vehicles are taxed at a rate of 75 percent of their original sales price.
The UK has the most advantageous taxes for company cars. Leasing companies and businesses can deduct the VAT. Company cars are charged a 35 percent tax but a reduction of one-third is permitted if a vehicle is used for more than 2,500 business miles a year, rising to a discount of two-thirds for vehicles used more than 18,000 miles for business travel. Critics say this encourages motorists to drive extra miles to qualify for tax discounts.
In a recent pricing study, the European Commission noted that taxes do make a major difference. 'But theoretically in a single market, you can go to another country and buy the car where it's cheaper before taxes,' said a spokesman for the Directorate General for Competition, which produced the study.