Ford to cut prices by 16% (UK)

Ford will cut the price of its Ka city-car, Fiesta supermini, Focus compact family car, and Kuga SUV from 5% to 16% (11% average) from 2nd August. The company says the cuts are to bring greater 'transparency' to its showroom prices, which have usually been heavily discounted when buyers haggle and follow an earlier round of reductions this year.

Ford says it now wants the list prices to be closer to what the customer actually pays. This move should make it easier for consumers to compare Ford's vehicles with those of other manufacturers. In April, Ford reduced list prices for its new S-Max, Galaxy and Mondeo models. Since then, it has increased sales on all three models. In the company car market alone, Mondeo sales increased by 18%, S-Max increased by 10% and Galaxy by 5%.

Ford also hopes that the revised prices will make its products more striking to company car drivers, who pay tax based on the car's list price.

Managing director of Ford GB, Nigel Sharp said: 'The traditional way that the car industry has operated in the UK – with high recommended list prices 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.'

While this is good news for private and company car buyers, prices will shoot up by 3% from January 2011, thanks to the Governments VAT increase, from 17.5% to 20%. From 2nd August, the entry-level Ford Ka Studio will cost from £7,996, as oppose to the current price of £9,360, saving £1,364.