Sales Drop, Ford and Vauxhall Increase UK Car Prices
According to BBC News, the two automakers explained the increase as necessary due to the weakness of the pound. "We have to increase our prices," said Vauxhall spokesman Simon Hucknall. "It is essential - it is not desirable, but it is essential," he added.
Therefore, Ford has announced an increase by an average of 4.7%, while Vauxhall is going to increase the prices of all models except the Vectra and VXR8 by an average under 5%. Apparently, the Ford rises mean more than £700 on the price of a Ford Fiesta, £800 on the cost of a Focus, £1,000 on the price of a Ford Mondeo, and £1,200 on the price of a Galaxy people carrier. Equally, the Vauxhall rises mean nearly £600 for a new Corsa, more than £800 on a new Astra and more than £1,000 on a new Insignia, which replaces the Vectra.
However, the decision is more than surprising as the UK government announced last month measures to support the auto industry. In fact, it comes shortly after Labour Business secretary Lord Mandelson last week announced a £2.3 billion bail-out for car-makers.
Quite obviously, the two automakers' decision is regarded as “idiotic” by Tim Urquhart, a London-based analyst with research firm IHS Global Insight because it is expected to accelerate the industry's decline.
“But the argument may be: What’s the difference? They’re not selling anyway, so we may as well charge a decent price,” he ironically explained.
And as if this wasn't “suicidal” enough, Ford claims that additional price rises may come if the pound's value continues to deteriorate. “Additional price rises are likely unless there is a strengthening of the value of the pound against the Euro,” it warned.