Ford cuts prices

The price of Ford models is about to fall

The UK's largest car seller, Ford, is to cut up to 13% off the price of its models.

The move, announced to dealers at a meeting on Monday in London, was welcomed by trade secretary Stephen Byers and campaign groups as a victory for consumers.

Mr Byers said: "We can now look foward to the other high volume car manufacturers following suit."

Consumers Association director Sheila McKechnie said that now Ford had "caved in" to consumer pressure, she expected other car firms to cut their prices.

Ford said the price cuts were intended to boost sales and bring stability to the wider new car sales market.

We believe this package...means that Ford customers can benefit from transparency of pricing

Ford's Ian McAllister

Ford said its package of new offers included a three-year, 60,000-mile warranty to be provided on most of its models.

The cuts, which take effect immediately, will see the 1.7 Ford Puma reduced by £1,960 to £12,995, while the Ford Focus, the UK best seller, will be £1,505 cheaper at £11,995.

Delivery charges on all new Ford cars will now be included in the recommended list price instead of being listed as a separate item.

Online plans

Ford said it would reimburse the difference to anyone who bought a car in September which was more expensive than the new prices, taking into account any cashback.

Ford UK managing director Ian McAllister said the new offers would clarify pricing policy for consumers.

"We believe this package of innovative, customer-focused initiatives means that Ford customers can benefit from transparency of pricing, buy with confidence and enjoy unprecedented ease of purchase," said Mr McAllister.

There has been speculation that Ford would cut its prices for most of the past year.

Government and consumer group criticism of the car industry in the UK has highlighted the fact that cars cost anything between 10% and 50% more than the same models in continental Europe.

The Competition Commission said after an investigation earlier this year that it was unhappy with the arrangements car makers had for selling cars.

'Prices have fallen'

Its recommendations for action, adopted by the government, were intended to cut up to third off the price of new cars.

The Society of Motor Manufacturers and Traders says the price difference between cars in the UK and elsewhere in Europe has been exaggerated by the weak euro.

It also says that the price of new cars in the UK has fallen by about 10% already this year.

The Alliance and Leicester monthly car price index fell 5.9% in August as manufacturers cut prices to try and tempt wary consumers back into the showrooms.

A number of other car makers have already cut prices in recent months, including Honda, Land Rover and Audi.

Ford's main rival for supremacy in the UK market, Vauxhall, said it believed its cars remained "excellent value for money".

A spokesman added: "We always maintain a close watch on our competitors' behaviour and we will certainly be looking at the details of this announcement."