Ford seeking further residual value uplift
14 April 2011
Ford is on a mission to prove it deserves a residual value uplift.
Fleet boss Kevin Griffin believes that the firm's behaviour in terms of discounting and reducing low-profit business means it deserves another residual value improvement on top of that achieved last year when it announced its Blue Tag policy of moving transaction prices closer to list prices.
Following the price realignments last year, Griffin said Ford received a 6% improvement in residual values. "I think we deserve more so we're showing people with transparency that we're changing behaviour," Griffin told BusinessCar. "We buy a certain percentage of the daily rental cars back and we can show the guides the prices achieved. There is more improvement to come."
He said the firm's new modesl are helping change the brand image. "We've got more new product than anyone else and our biggest thing is to get people to drive our cars," he said. "Part of it is changing driver behaviour - building-in technology, talking about technology and delivering it. We have technology that no-one else has packaged in this particular way. It's about getting the 'wow-factor' up."
The Driver Assist package is a prime example, bundling a host of safety systems into one option for the new Focus, priced at either £750 or £1000 depending on the trim level.
"I think uptake will be reasonable to significant - £750 over three years and 60,000 miles is not a lot of money," Griffin said. "A similar thing happened on commercial vehicles with park-distance sensors. They have a cost association but the cost was outweighed by the damage people were getting to vehicles - it was a real and sensible investment."
He predicted 20-30% of the mix will spec driver assist. "For the fleet managers I have spoken to, the duty of care is clear - a lot have seen it and said it's real and practical, not gizmos.
"But the key is - is a car worth more because it's got it? Going back to the Escort XR3i we had to have alloys and a sunroof so the RV case was much stronger. Because Driver Assist is so functional and visible, we believe it's got some value but don't know yet what it will be."
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