Ford lowers prices by 11 per cent

The manufacturer introduced ‘blue tag’ pricing – a method aimed at removing confusing discounts and offers – earlier this year on its larger models and has now extended the pricing strategy to smaller cars such as the Ka, Fiesta, Focus and Kuga.

The result is lower permanent prices for Ford cars and the removal of dealer-specific discounts. Ford says it will be more transparent and less confusing for customers.

Nigel Sharp, managing director Ford of Britain, said: “The traditional way that the car industry has operated in the UK – with high recommended list price matched to high discounts – is causing confusion for consumers.

“Together with our dealer partners we are determined to change that formula and make the whole purchase process more transparent and the value of Ford cars more obvious.”

Prices for the Ford Ka Studio now start at £7,995, while the Kuga Titanium is now available from £22,485.

The most popular Ford cars, and the two best-sellers in the UK in 2010, the Fiesta and Focus, are priced at £9,995 and £15,545 respectively, and are expected to continue to be the most popular models in the range.

Ford even predicts an upturn in sales after seeing a similar boost when blue tag pricing was applied to its larger cars.

Kevin Quigg, Ford Dealer Council chairman, said: “There was an immediate effect in the showroom as a result of the lower list prices on large cars. Ford dealers are delighted to see the company continuing to lead the market by applying the initiative across the entire Ford car range.”

Sales are expected to be given a further boost as customers rush to buy a new car before the 20 per cent rate of VAT comes into effect at the start of 2011.

Dealers are urging customers to buy early to avoid price increases, as VAT is applied when a car is delivered, not when it is ordered.