Ford Forced to Raise Car Prices by Another 4%
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After the end of June, Ford are raising their prices by on average 4% for new car buyers. Ford have currently rose their prices 3 times now this year. The hikes began in February with a rise of 4.7%, they then rose again during April by 3.75%.
Ford stated that it does sound strange to raise car prices during a recession, but they also said that they had no choice because of the weak pound, “there is no choice if we are to maintain a viable business”.
Ford stated that the pound had been stable for the last 10 years until the end of 2007 at 1.43 euros, however, during the past 2-3 years, the pound has fallen to 1.16 euros.
Ford were forced to raise their car prices because most of the cars produced for the UK are manufactured in Spain and Germany. Before these price rises, Ford had been absorbing the losses which end up around £3,500 for every vehicle sold, however, they cannot sustain this if they plan to keep a stable business, especially during the recession.
The car scrappage scheme will also be affected by the price hikes, the £2000 grant will have a huge chunk taken out by the increase in Ford prices. With the prices of all Fords cars, including the Ka, Fiesta and Focus, rising by around £600 - £750. The car scrappage scheme will be having less of an affect on the price now.
Although this is all bad news for new car buyers, people choosing car leasing over buying won’t see the price rises straight away. Even if you are not currently on a Ford lease, but you are looking, the leasing companies won’t pass on the price rises until they buy new vehicles, which, during the recession, won’t happen straight away. This news appears to be weakened slightly for leasing customers, compared to the big effect it will have on new car buyers.
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