Pricing issue far from over

Car manufacturers want to convince everyone the issue of UK “over-pricing” has been dealt with, but the saga may be far from over.

The year has seen a marked change from the time when the industry waited for Ford's next price rise and reacted. Ford dug its heels in and did little on prices for a long time. When the cut came in early autumn, Ford typically had to be much cleverer than have a simple reduction.

The company kept quiet about increases, like the doubling of the charge for automatic transmission.

Vauxhall was more straightforward, waiting for the Birmingham motor show announcement on new Mondeo prices. Then it launched a counter attack with an aggressive “buy a Vectra 2.2 for the price of a Mondeo 1.8”.

Peugeot's “significant” price reductions conflict with the claim two weeks earlier that, with sales at an all time high, there was no need to change pricing. As Ford had also said, the special deals were working well, according to Peugeot.

A raft of reductions from Peugeot were in most cases nominal and a continuation of consumer offers like free insurance and 0% finance on most 106 and 206 derivatives. Reductions vary according to the level of demand for each model.

Peugeot also added satellite navigation to most 406s while cutting the price, and Toyota did the same with the Avensis. Prices for the new VW Passat and Renault Laguna prices are sharper than ever.

Toyota reduced the recently-revised Avensis in the light of the moves on the new Mondeo and Vectra. GS, SR, GLS and CD models are all cut by £1,250.

Ford spent a long time insisting that retail buyers preferred great customer offers, but its dealers were not so sure. Other manufacturers have hung onto them – Citroen's latest list matches the cut in list prices with the same amount in cashback.

Renault and Vauxhall retain some special deals, and Nissan dug in its heels with offers rather than a list price reduction. But most, like MG Rover, consolidated a run of special offers into a new price list.

Retail buyers may be fed up with waiting any longer and normal buying patterns might resume.

Before long though, a fresh “cars are cheaper abroad” campaign is likely, because that is certainly still the case. Marketing departments have shown they are prepared to cut prices a second time – witness Porsche, Saab and Fiat.

So perhaps the pricing issue has not been resolved nearly as tidily as the industry had hoped.

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