Pound drives Ford to raise prices
Jun 25 2009 by Iain Laing, The Journal
FORD is to raise the price of its cars by an average of 4% in the UK, blaming the weakness of the pound against the euro.
The US group has now increased prices three times this year, with a 4.7% rise last February and another 3.75% in April.
The list price of Ka, Fiesta, Focus and Mondeo models will rise by £600 to £650 while an S-Max will cost £700 more and the price of a Galaxy will go up by £800.
The company said that with the motor industry badly hit by the recession the move “may seem counter-intuitive”, but Ford UK managing director Nigel Sharp said: “With so many of our costs priced in euros, there is no choice if we are to maintain a viable business.” Many of the Ford cars sold in the UK are assembled in Germany and Spain and Mr Sharp said while the pound had been around 1.43 for a decade until the end of 2007, sterling had recently fallen to about 1.16.
“The cost impact of this drop on a car priced at £15,000 is close to £3,500, which has to be absorbed by the business,” he said. “The total revenue impact has been huge – well into nine figures – on Ford’s UK business.”
The three price rises will cancel out most of the savings from the Government’s scrappage scheme, which gives customers £2,000 off a new car if they trade in a vehicle that is more than 10 years old.
The revenue impact has been huge – well into nine figures – on Ford’s UK business.
