Ford Blames Weak Sterling For Latest Price Rise

Thu, 26 Nov 2009

Ford has announced price
increases across most of its UK range from the start of December 2009.  The price rise, an average of 2.7 per
cent, will apply to orders received after November 30 and are driven entirely
by the continued weakness of the £.


 


Since 2007 the devaluation in the £ has been in excess of 30
per cent.  In the same period Ford
has taken strenuous cost reduction actions to limit the impact on
customers.  Through these measures,
Ford and its dealers have reduced the cost impact that has to be passed on to
customers.


 


"To combat the continuing
weakness of the £ against the Euro, Ford has reduced costs across its entire UK
business, including personnel reductions in its central operation and across
its dealer network," said Nigel Sharp, Ford of Britain managing director.  "However, price increases are still required
to maintain a viable business and to recover relative cost increases caused by
the weakness of the £ over an extended period."


 


The drop in the value of the £ by about a third versus
pre-2008 levels is a fundamental business concern for all UK-based businesses
whose costs are incurred in Euros.  While
smaller capacity Ford engines and the Ford Transit commercial vehicle are
assembled in Britain, other vehicles and component parts are imported from the
continent, which brings a significant cost penalty as a result of the depressed
£/€ exchange rate.


 


Decisions to raise
prices are taken only as a last resort and Ford will continue to provide the
market with affordable, high-value, latest-technology vehicles.  Customers trading in used Ford vehicles
are benefitting from strong residual values, which reduce the overall cost to upgrade
to a new vehicle.  


 


Prices for Ford vehicles will rise
by an average 2.7 per cent, meaning an extra £250-£500 on the most popular
models Ka, Fiesta, Focus, C-MAX,
Kuga and Mondeo rising to £600 on
a Ford S-MAX and Galaxy. 
Similarly, for commercial vehicles the Fiesta Van increases by £400,
Transit Connect and Ranger by £500 and the Transit 1T model by £600.  Prices for the Ford Focus RS and the
Transit 2T remain unchanged.


 


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