01 June 1999

THE UK'S OVERPRICED new car market could be blown wide open by the Ford Motor Com-pany's aggressive new dealer discounting policy.

Dealers willing to take ten or more Mondeos into stock now receive £3,000 discount per vehicle, lifting their theoretical profit margin to around £4,000 per unit on models selling in the £15,000-£17,000 price range. Lesser discounts of around £2,200 - on top of normal margins - are also on offer to dealers taking fewer than ten Mondeos, whilst cuts of circa £1,200 and £800 are available respectively on Fiesta and Ka models. It is probable that much of these discounts will be passed on to buyers - a scenario that could force the rest of the trade to follow suit.

Mondeo is now the UK's top-selling model and, given the current buoyancy of new car sales, Ford's move looks to be strategic rather than a short term sales promotional tactic. The company refused to comment but Richard Palmer, chief executive of vehicle distributor European Motor Holdings was less reticent: ' This could be the start of an overall realignment for the industry - a case of jumping before the Competition Commission pushes.'