The boss of Ford UK has defended the company’s announcement of across-the-board price rises from 1 April by claiming that the firm is in a “battle of survival.”
Nigel Sharp, Ford of Britain’s Managing Director, said “the decline in the value of the pound has probably had as much impact on our business as the decline of the overall car industry.”
“Most of our costs are in Euros and our revenues are in pounds,” said Sharp, “we still make engines in the UK and the labour costs for those engines are in pounds, but some of the material costs and the cost of ancilliary equipment are in euros too, or commodities in dollars. The net effect is a huge squeeze on margins, which have become non-existent.”
“We tried to stave off some of the increases last year to protect the market and protect demand, and we have also worked very hard to reduce the costs that we could control… it’s not something that we want to happen, but it’s something that we have to do survive in business.”
Sharp also predicted that the rest of the industry will increase prices on the back of Ford’s announcement and we have already seen Kia follw suit.