Magazine article Marketing

Ford Drops Incentives and Signals Fresh Price War

Magazine article Marketing

Ford Drops Incentives and Signals Fresh Price War

Article excerpt

Ford drops incentives and signals fresh price war

Ford is to jettison its free insurance and low-rate finance schemes because it claims that consumers prefer lower list prices to value-added incentives.

The UK car market leader is expected to announce the changes to dealers on October 1, when it outlines its promotional programme for the last quarter of this year.

The move is likely to have reverberations throughout the troubled market and lead to a fresh round of price-slashing. Car makers are currently under scrutiny by the Monopolies and Mergers Commission for the relatively high list prices of cars in this country compared with other EC markets.

Despite a severe fall in UK car sales -- expected drop to 1.5 million this year compared with 2.3 million in 1989 -- manufacturers have continued to offer incentives like lowrate finance, free insurance, free extras and free after-sales services rather than concentrating on lowering the list price.

Ford finally changed tack in July by offering up to 2000 [pounds] off various models. Vauxhall followed with a "cash-back" scheme offering up to 1500 [pounds] as a "refund". …

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