Ford raises UK prices – Again

It’s only a couple of months since Ford raised prices in the UK, citing the weakness of the pound against the Euro as the cause. I guess that’s what happens when you stop building cars in the UK (Ford only build engines here now). Interestingly, this comes just a week after Sterling hit a 2009 high against the Euro, and Sterling’s value has increased by 10% since Ford’s last 3.75% increase in April. Hmm.

It’s not difficult to work out that companies only stay in business if they make a profit. And Ford has done very well to keep out of the worst of the problems that have engulfed GM and Chrysler. And to be entirely fair to Ford, they probably expected to see more of a recovery in the value of Sterling in the last three months than we’ve seen. But they have now factored in to their UK prices the full loss in the value of Sterling in the last 12 months. Sterling is now around 7.5% lower against the Euro than it was 12 months ago, and this UK price increase of 4% by Ford takes their increases to 7.75%.

In thruth, Ford can probably get away with this at the moment as they are doing well out of the Scrappage Scheme, selling around 1500 cars a week linked to the scheme. And with £2k off, the price increase won’t hurt as much. But we will still see prices rise by around £500 on a Fiesta, which will hurt Ford, and see them losing ground to the likes of Hyundai, particularly on deals under the Scrappage Scheme.

Let’s hope that when Sterling starts to recover we see a similar reduction in prices. But don’t hold your breath.

Price increases take effect from 1st July.

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