Ford explains ‘Blue Tag’ pricing

The updated Ford S-Max and Galaxy have been reduced by as much as £2,000 compared to the outgoing models, a reduction made possible because the manufacturer has abolished showroom discounts.

In the past, Ford has offered showroom discounts and deals to buyers. However, recently Ford decided to stop the tactic and instead focus on set prices to make it easier for customers to understand the end price – a tactic called ‘Blue Tag pricing’.

Explaining the lower S-Max and Galaxy prices, Simpson said: "The prices for the new models show a reduction of 10 to 12 per cent (£2- £2,500) over the outgoing versions. We want to be transparent with our pricing strategies and the new published figures are the real transaction price."

He also believes the new pricing strategy will improve the residual values of the new cars and benefit commercial drivers because of reductions in BIK company tax.

He said: "With prices and discounts both reduced, residual values for existing owners are unchanged and residual values for the new models are set to improve by up to £1,275."

The S-Max now costs £20,645 and the Galaxy range starts at £22,945 and Simpson has promised lower prices for the smaller Fiesta and Focus models if the pricing is a success.

The seven-seat Ford S-Max and Galaxy MPV are two of the new cars for the Ford 2010 model year which also includes the new Ford Mondeo.