Ford UK launching its revised S-Max and Galaxy models at prices up to 12% below the outgoing models, is looking at similar price cuts for other cars in its range.
“The weakness of the pound has been a big problem for us forcing up our costs, but discounting prices doesn’t work in fleet markets because Benefit in Kind tax is based on CO2 and the list price,” he said.
About 65 per cent of Galaxy sales and half of S-Max sales are to business customers.
So, in the interests of transparency, the transaction price – the price most customers pay after haggling – will become the sticker price, or ‘Blue Tag’ price as Ford is calling it.
Ford has achieved this by reducing dealer margins and showroom discounts; savings are between £2,500 and £3,000.
“We’ve already reduced prices on Mondeo and we’re looking at the rest of the range,” said Mr Simpson.
“But we have a lot of stakeholders including dealers, lease companies and ourselves. The system looks like its working but we will study it before rolling it out to other models.”