The sustained weakness of Sterling against the Euro, has forced Ford to announce price increases across its UK range from the start of July 2009. The price increase, an average of 4.0 per cent, will apply to all orders received after 30th June.

“In common with most of the UK auto industry, Ford is reacting to the sustained weakness of the £ against the Euro,” said Nigel Sharp, managing director Ford of Britain. “Raising prices in difficult times, and when a scrappage scheme has been introduced, may seem counter-intuitive but with so many of our costs priced in Euros, there is no choice if we are to maintain a viable business.”

“The exchange rate through to the end of 2007 had been stable for around ten years with the £ worth around €1.43, recent exchange rates have been about €1.16,” he added. “The cost impact of this drop, on a car priced at £15,000, is close to £3,500, which has to be absorbed by the business. The total revenue impact has been huge – well into nine figures – on Ford’s UK business.”

Even with the recent strengthening of the pound, he warned that the need to recover this accumulated revenue loss could lead to further price increases. Price-inflationary pressure would continue to be an issue for all UK-based businesses whose costs were incurred in Euros.

Prices for Ford cars will rise by an average of 4.0 per cent, meaning an extra £600-650 on the most popular models, Ka, Fiesta, Focus, C-MAX, Kuga and Mondeo; rising to £700 on a Ford S-MAX and £800 for a Ford Galaxy.