Ford and General Motors have said they planned to hike UK car prices despite falling sales, as they struggle to combat the impact of the weak Pound.
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Ford said its prices would go up by an average 4.7% across all its ranges from today and warned of further hikes unless Sterling firmed against the Euro.
Meanwhile GM’s major brand Vauxhall said it would also increase prices this month, although no details were yet available on the scale of the rises.
The news comes just a week after Business Secretary Lord Peter Mandelson outlined a package of Government support for the embattled UK car industry potentially worth up to £2.3billion.
Howard Wheeldon, of BGC Partners, said: ‘With fields and car parks right across the country piled high with unsold cars, it may come as something of a surprise to hear that both Ford and GM are planning to raise the price of all cars they sell in the UK.
‘Of course, announcing a price rise is one thing but putting it into effect quite another. From a customer perspective, there has probably never been a better time to buy a car.’
‘Severe economic pressures’
Ford said the UK car industry had been subject to ‘severe economic pressures’ by the Pound’s deterioration against the Euro as costs incurred in production and materials in Europe rocketed as the exchange rate became less favourable to Sterling.
The Pound’s slide against the single currency has been swift, falling from around 1.34 Euros at the beginning of 2008 to an all time low of 1.05 at the end of the year.
A Ford spokesman said: ‘We are reacting to what’s really an industry concern with the value of Sterling plummeting against the Euro.
‘With so many of our costs being in Euros and the pound having gone down so dramatically we have to redress the balance.’
Mondeo up by more than £1,000
Under the new pricing scheme, the price of a new Ford Fiesta will increase by an average of £724, or 4.7%, to a minimum of £9,195.
The cost of a Ford Mondeo is set to jump 5.25%, or £1,059 to around £16,595, while the Focus Coupe-Cabriolet will see the biggest price rise, up 6.28%, or £1,223, to a minimum of £18,795. Ford Ka will see the smallest rises, up 1.6% to around £7,945.
A spokesman for Vauxhall said: ‘We have to increase our prices. It is essential, it is not desirable, but it is essential.’ He said offers such as zero percent finance and low requirements for deposits would still attract customers.
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