Ford Offers Discounts to UK Dealers, Potentially Lowering Car Prices

Strategic Insights -

Ford is offering discounts to UK dealers on several models, including the Mondeo, in an effort that could lead to lower new car prices in the UK. The discounts, which range from £2,200 to £3,000, are part of an incentive program aimed at boosting sales. This move comes as the Competition Commission investigates allegations of high prices and anti-competitive practices by carmakers. The discounts will help reduce the cost of new cars, potentially benefiting consumers and dealers alike.

Key Takeaways:

  • Ford is offering discounts of up to £3,000 on Mondeo models to UK dealers who accept 10 or more vehicles per month.
  • The discounts are available in addition to the usual dealer margin, taking theoretical profit margins to around £4,000 per car for vehicles priced between £15,000 and £17,000.
  • Discounts of around £2,200 are being offered to dealers who take smaller numbers of Mondeos, effectively raising the overall discount to over £3,000.
  • Discounts are also being given on Fiesta and Ka models, with £800 and £1,200 being offered above the usual dealer margin, respectively.
  • The incentives are aimed at helping shift old inventory and may be part of a broader price realignment for the industry, according to industry experts.

Statistics:

  • The discounts offered on Mondeo models range from £2,200 to £3,000.
  • The theoretical profit margin for dealers taking 10 or more Mondeos per month is around £4,000 per car.
  • The list prices of the vehicles affected by the discounts range from £15,000 to £17,000.
  • The Retail Motor Industry Federation represents around 6,000 franchise dealers in the UK.

Sources:

  • "Ford's £3,000 price cut deal," Financial Times Limited, reported on Page 10 on an unspecified date in 1999. (Copyright 1999)