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Industry starts to cut car prices

Barrie Clement Transport Editor
Tuesday 07 September 1999 23:02 BST
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STUNG BY allegations of price-fixing, car manufacturers are beginning to cut the price of vehicles and could soon make further reductions.

Prices are already 0.4 per cent lower than last September, according to the CAP Motor Research group. Industry analysts predict that Ford will be the first big manufacturer to reduce prices further.

The move would help to quell protests about Britons paying far more for new cars than other Europeans.

Paul Jarvis of Glass's Guide, the trade's reference book on vehicle values, said dealers and manufacturers thought Ford was about to cut prices by 10 to 15 per cent. It could mean pounds 1,000 off a new Ford Fiesta, pounds 1,500 off a Focus and pounds 3,000 to pounds 5,000 off a top-of- the-range Mondeo.

A spokesman at CAP Motor Research said price cuts were now outweighing rises, with the biggest reductions in the "supermini" sector. New models were also coming on to the market with "vastly superior" extras, and were selling at the same price, or less, than older models.

A Ford spokesman denied there were plans for across-the-board price cuts, but conceded there may be special offers.

Industry watchers think Ford might be attempting to pre-empt the report on price-fixing from the UK Competition Commission, which is due to complete its inquiry in December. Ford is due to give evidence to the commission this week and will deny any suggestion of anti-competitive activity or profiteering.

New cars cost up to 90 per cent more in Britain than on the Continent, according to an EU survey, which said the UK was the most expensive place to buy 62 out of the 75 bestselling models. The Consumers' Association said Britons are overpaying by pounds 6bn every year.

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