03 October 2000

Ford Britain yesterday became the first major car manufacturer to cut its list prices, putting other motor firms under pressure to follow suit.

The cuts of between 5% and 13.1% came only months after Ford insisted it would not lower prices.

However, the move may not have much impact on the amount customers actually pay for their new cars. Garel Rhys, professor of motor industry economics at Cardiff University’s Business School, described Ford’s decision as “mainly smoke and mirrors”, barely affecting transaction prices.

Ford has admitted that the lower list prices will take the place of temporary discounts and special offers, leaving the price for private customers little different.

However, trade and industry secretary Stephen Byers hailed the decision as a triumph for consumers. The move follows a government order earlier this month altering retail and distribution practice in a bid to make the new car market more competitive.

News source: Financial Times