Ford to cut list prices to boost fleet sales
01 July 2010
Author: Tristan Young
Ford will drop the list prices of its smaller cars on 2 August, completing the action it started on the larger models in April.
The second stage of what Ford internally calls Blue Tag will see transaction prices remain static, but list prices cut by between 6% and 15%, according to Ford's fleet sales director Kevin Griffin.
Ford's aim is to improve the attraction of its models to user-choosers who are taxed at the P11D price, which is fixed, and not altered by any discounts that may occur when the car is bought.
Commenting on the price increases that occurred in 2009, Griffin said: "The exchange rate hurt us when it dropped at the end of 2008 and through 2009. There was a 30% difference, so we took the critical decision in the UK to raise prices.
"When we priced in December 2009 and the competition didn't follow, that cost us."
Griffin said the first round of price cuts, carried out in April, had worked well.
"Average transaction price hasn't changed and, so far, RVs have been stable in the market. Fleet sales of Mondeo are up 18%, S-max is up 10% and Galaxy 5%.
"I think we can do more, too, because is takes some time for the changes to come through the corporate structure," he added.
"The Euro's at 83p now, it was at 90p at its highest and back in early 2008 it started at 60-70p. The pricing change accounts for a 20% saving and 10% comes from internal cost efficiency savings."
The list price cuts mean a Ford Fiesta 1.4D Zetec 5dr has been reduced £1350 to £13,845 and a Focus 1.6D Zetec 5dr falls from £20,195 to £17,145. The average price drop across all model included in the action stands at 11%.