Fleet News

Ford begins talks with fleets over latest price cuts

Ford has begun talks with its fleet customers in advance of the final stage introduction of its price realignment policy, which has seen thousands of pounds cut from the list price of its cars.

In August, Ford will cut the list prices of its small car range in a move that will see up to 11% come off the published prices of its Focus, Fiesta and Ka.

In April the company cut the published prices of its large cars – Mondeo, S-Max and Galaxy – allowing company car drivers to benefit from lower Benefit-in-Kind tax bills.

Ford stressed that the move does not affect the price fleets pay for their cars – the transaction price stays the same.

Essentially, fleet discounts and dealer discounts and margins were reduced or done away with altogether and instead used to reduce the published list prices.

It is this list price that is used to calculate BIK bills not the actual price paid by fleets for their cars.

Companies also benefit from lower National Insurance bills for company car drivers as a result of the lower P11D prices of the cars.

Now, from the start of August, Ford will reduce the list prices on all its medium and small cars. 
This final stage in the programme follows seasonal promotions featuring discounts of up to 15% off larger Ford cars introduced in February.
In April, these promotions effectively became permanent on the large cars and now they will be applied across the entire car range.

“High discounts are detrimental to the brand – well performing brands have a transaction price close to their list price,” explains Kevin Griffin Ford fleet sales director.

“There is more stability in the RVs because there is less discounting.”

The high list pricing was also showing Ford’s cars to be overly expensive on pence-per-mile wholelife cost calculations, as these are calculated using the list rather than transaction price.

The new pricing policy should resolve this issue.
“We have proved that this works,” says Griffin. “But the real benefits are for the company car driver in reduced BIK liabilities.”

But Griffin admits some fleets still expect a discount. “Everyone expects discounts,” he said.

“The level of discounting has been an issue with fleets - they need to be comfortable with the true value and how much they should be paying per month.”

Ford he said will convince them that despite losing discounts they will still be getting a good deal and will also be “less vulnerable” to RV fluctuations.

As a result of the new policy, the recommended list price of a Ford Ka Studio will be £7,995; the recommended list price for a Ford Fiesta Studio will be £9,995, the recommended list price of a

Ford Focus Zetec will be £15,545 while the recommended list price of a Ford Kuga Titanium will be £22,495.

This compares with recommended list prices of £9,360, £11,645, £18,345 and £23,795, respectively, for the outgoing models. 
 


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