Fleet News

Ford 'highly unlikely' to slash prices

A SINGLE currency and tax harmonisation across Europe are more likely to lead to a convergence of new prices between the UK and the continent than manufacturers cutting list prices, according to Ford of Britain's new marketing director. After just a month in the UK and reflecting on his previous 24 years working for Ford in the US, John Mendel said it was highly unlikely the company would be slashing prices in order to satisfy the demands of the Consumers' Association.

The CA has accused car makers of operating a price-fixing cartel and which is the subject of a Competition Commission inquiry. Speaking at the launch of the facelifted Ford Fiesta, he told Fleet NewsNet: 'Until you get unified currency, taxes and unified product in terms of specification then there is not really a strong argument for price alignment. We are a public company and if you look at the returns we make on our investment purely on the transaction process of selling a car we only make 1%.

'Imagine if I told you to give me your life savings because I could make give you a 1% return on it. You wouldn't be impressed. We are in a similar situation and I therefore don't think prices are too high in the UK.' Mendel added: 'In the US the Japanese manufacturers reduced prices, but people didn't flock to buy them above our cars. Reducing the price cheapens a car's image. The inequality of taxes and currency rates is a question that needs to be answered.'

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