Continued Pound Weakness Drives Ford Price Rise

BRENTWOOD, UNITED KINGDOM – November 25, 2009: Ford is announcing price increases across most of its UK range from the start of December 2009. The price rise, an average of 2.7 per cent, will apply to orders received after November 30 and are driven entirely by the continued weakness of the £.

Since 2007 the devaluation in the £ has been in excess of 30 per cent. In the same period Ford has taken strenuous cost reduction actions to limit the impact on customers. Through these measures, Ford and its dealers have reduced the cost impact that has to be passed on to customers.

"To combat the continuing weakness of the £ against the Euro, Ford has reduced costs across its entire UK business, including personnel reductions in its central operation and across its dealer network," said Nigel Sharp, Ford of Britain managing director. "However, price increases are still required to maintain a viable business and to recover relative cost increases caused by the weakness of the £ over an extended period."

The drop in the value of the £ by about a third versus pre-2008 levels is a fundamental business concern for all UK-based businesses whose costs are incurred in Euros. While smaller capacity Ford engines and the Ford Transit commercial vehicle are assembled in Britain, other vehicles and component parts are imported from the continent, which brings a significant cost penalty as a result of the depressed £/€ exchange rate.

Decisions to raise prices are taken only as a last resort and Ford will continue to provide the market with affordable, high-value, latest-technology vehicles. Customers trading in used Ford vehicles are benefitting from strong residual values, which reduce the overall cost to upgrade to a new vehicle.

Prices for Ford vehicles will rise by an average 2.7 per cent, meaning an extra £250-£500 on the most popular models – Ka, Fiesta, Focus, C-MAX, Kuga and Mondeo – rising to £600 on a Ford S-MAX and Galaxy. Similarly, for commercial vehicles the Fiesta Van increases by £400, Transit Connect and Ranger by £500 and the Transit 1T model by £600. Prices for the Ford Focus RS and the Transit 2T remain unchanged.