Ford and Volkswagen have announced price cuts on selected models in order to clear unsold stock and stimulate customer demand in a move that follows Vauxhall's pre-emptive strike on pricing last month and a series of cuts from prestige manufacturers including Porsche and Alfa Romeo.

Ford claimed its price cut was “dealer led” with ads paid by regional dealer marketing budgets. The ads quote Ford's recommended retail price alongside a local dealer price, with as much as £1,905 off a Mondeo Zetec.

But the bigger price cuts are only available on older stock. The Mondeos on offer are more than six months old, and the Focus Zetecs – £1,505 off list price – were built before January.

A Ford spokesman said: “These prices were not set by Ford, they were set by the dealer body. Dealers make their own business decisions about what prices they sell the cars at.” Volkswagen said its price cuts, as much as £2,500 off a Sharan and £2,000 off a Passat would affect “4,000 to 5,000” models. They are designed to clear old stock built before January when specification improvements were introduced.