Ford are to raise UK prices by an average of 4%, blaming, once again, the weakness of the pound against the euro for its decision.
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 a Galaxy will go up by £800 and the price rises will apply to orders received after 30 June.
Ford conceded that raising prices, in a recession with a scrappage scheme in place, “may seem counter-intuitive” which is probably putting it mildly.
“With so many of our costs priced in euros, there is no choice if we are to maintain a viable business,” said Nigel Sharp, managing director of Ford in the UK.
He said that sterling had been stable at about 1.43 euros for about 10 years up until the end of 2007, but that the pound had recently fallen to around 1.16 euros.
“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,” Mr Sharp said.
“The total revenue impact has been huge – well into nine figures – on Ford’s UK business.”
Ford had already raised its average prices by 4.7% in February and 3.75% in April, rises also put down to the strength of the euro but since then the pound has rallied and reached a seven month high against the US Dollar at the start of June.
Perhaps Ford should have held off on this price rise until after the scrappage scheme has concluded
It certainly does seem “Counter-intuitive” at best.