New pricing strategy will help fleets, claims Ford
Seasonal promotions featuring discounts of up to 15% had been introduced across the Ford UK dealer network in order to maximise trade in March and were due to expire later in the spring. However, amid concerns that its high list prices were putting company car drivers off with punitive BiK rates, S-Max, Galaxy and Mondeo will now retain their "deal" prices.
The move means that the recommended list price of a Ford Mondeo Zetec will now be £18,445; the recommended list price for a Ford S-Max Zetec will be £20,645, while the recommended list price of a Ford Galaxy Zetec will be £22,945. This compares with recommended list prices of £20,836, £22,677 and £26,355, respectively, for the outgoing models.
Ford fleet boss Kevin Griffin explained the decision: 'Since December 2007 we've been fighting against the exchange rate and had put prices up four times, by a total of 20%, so that we had got to a position from a fleet perspective on list prices and tax where we were not competitive enough.
'To be honest, the feedback we were getting was more anecdotal than anything, but we were hearing that on BiK and other list price related charges we didn't stack up any more, so we had to act.
'New models of S-Max, Galaxy and the new series of engines on Mondeo will see list prices come downwards, although the acquisition price remains the same. How have we done this? By reducing dealer margin and reducing the rebate to fleet customers.
'We've got the leasing companies together to explain the changes, and although we are cutting rebates, for many firms the cars are funded against list price, so that should see a saving.
'What it does is put us back in the ball park. It's a different way of going to market, by reducing rebates, but we believe it will work.
'As for residual values, we've spoken to Glass's and CAP and the bottom line is that, providing the transaction prices do not see a devaluation, and the specs aren't changed, we shouldn't see any negative effect on used prices.'
CAP confirmed it was comfortable with the major price revisions. A spokesman stated: 'Provided transaction prices are unaltered this is a win-win for Ford and its customers. As well as reducing the BiK user-choosers will pay on the P11D price, the gap between list prices and used market values is already sufficient for there to be no reason for any negative impact on residual values.'