Car dealers are fighting to recover sales hit by consumer fears that British cars are overpriced, writes David Duffy.

Peter Vardy, chairman of the dealer chain Reg Vardy, which sells Citroen cars in Banbury, said the launch in September of a "Rip-off Britain" campaign by the Consumers' Association designed to get shoppers to boycott showrooms and buy their cars on the Continent had seriously affected the industry. He said the result was that shoppers flocked to Europe to snap up new cars, making savings of up to 40 per cent.

Internet car sales operations, such as that set up by Richard Branson's Virgin Group, have also attracted buyers with of cut-price offers.

But dealers in Oxfordshire say they are confident they can cut a deal as good as buyers would get anywhere in Europe.

Greg Light, general manager of Oxford Saab, said: "Our recommended prices are negotiable. We have a great deal of freedom to tailor deals to suit individual requirements. "That may include negotiations on finance terms, a generous part-exchange allowance, and price.

"While we can't guarantee to match any deal that customers may get in Europe, we can come closer than most people would expect."

Mr Light, whose dealership operates from Cumnor Hill, said that along with many other franchised dealers in the UK, a full manufacturer's three-year/60,000-mile warranty with roadside assistance was included in the price of a new car. He said: "In Europe you will only get a 12-month warranty and it would cost around 1,000 to extend the cover to three years.

"These are factors that can have an impact on the re-sale of imported cars."

Embattled car maker Rover Group has also gone on the offensive against Internet car sales.

It said its ten per cent price reduction on new cars, announced on June 5, would continue, offering savings of between 900 and 2,845. Marketing director John Sanders said: "Rover dealers can provide better value than any dot.com business supplying cars from Europe."