Autodealer responds to post-Budget price increase of electric vehicle VW Golf GTE

Correspondence between auto importer Continental Cars and Volkswagen Europe, seen by BusinessNow.mt, shows that an increase in the price of the Volkswagen Golf GTE had been planned for close to a year.

Cynical electric car enthusiasts who believed that the €3,000 increase in the grant Government offers to incentivise the purchase of electric vehicles (EVs) would end up in autodealers’ pockets rather than those of their customers seemed to have been vindicated on Wednesday when the price of the VW Golf GTE increased by €2,000 overnight.

A representative of Continental Cars, a major car dealership representing Volkswagen, Porsche, Audi and Seat on the local market, explained that the increase was due to the inclusion of two features previously listed as extras in the standard model of the car.

Correspondence between Continental Cars and their Volkswagen Europe liaison shows that the change in the standard features had been planned for close to a year.

In fact, Continental Cars found out about the change when it came to fulfil a long term contract which required the purchase of six new Golf GTEs. Surprised by the increase in the price, the company reached out to the VW liaison, who explained the situation in a series of back and forth emails seen by BusinessNow.mt.

On Thursday, Transport Malta also waded into the controversy, sending a notice to all new car importers against inflting the price of EVs.

The authority also looked into the particular case involving the Golf GTE, and said it was satisfied with the company’s explanation, saying it had seen correspondence that indicated that the change was mandated from abroad.

Sandro Cauchi, general manager at Continental Cars, further explains that this was the second increase in as many weeks, with a prior increase in the recommended retail price of the car of €600 absorbed by the company precisely to avoid giving the wrong impression in view of the then-upcoming Budget and the expected increase in the EV grant.

“Of course, absorbing €600 is one thing, absorbing over €2,500 is another,” he said.

He further pointed out that the two features newly included as standard actually carried a combined retail cost of €2,155, meaning that the €2,000 price increase was actually a god deal for the consumer.

Mr Cauchi also explained that Continental Cars has an extensive range of EVs and plug-in hybrids (PHEVs), but the only vehicle to see a price increase was the Golf GTE – a clear indication that it was unrelated to the EV grant.

“If an autodealer were trying to pocket some of the EV grant increase for themselves, would they only increase the cost of a single vehicle with a low sales volume and justify it through the inclusion of extras worth more than the price increase?” he asked.

“It’s just ridiculous. We acknowledge that the timing was unfortunate in terms of public perception, but honestly, if anyone thinks about it for a minute, the facts quickly become evident.”

On Wednesday, a director of Mizzi Organisation, Continental Cars’ parent company, said that car importers would be “foolish” to increase prices when asked to address concerns aired on social media.

“There will always be negative people and conspiracy theorists,” said Ian Mizzi. “I think that the proof of the pudding is in the eating. In a short while we will be able to see if the measures announced in the Budget have the desired effects.

“We operate in a competitive market and all the players would like to be in a position to sell their products.

“Therefore, I do not envisage a scenario where new car importers would be foolish enough to price themselves out of the market.”