FORD AND PEUGEOT are the latest brands to cut prices in what is quickly becoming a new car price war on forecourts ahead of the 2010 sales. With estimates putting the potential new car sales at 57,000 for next year and some suggesting that without scrappage they could fall as low as 35,000, the battle is on to secure every new car sale out there.
Ford is announcing upgrading of specification of its core models. The Focus and Mondeo are gaining standard equipment at no extra cost, while there is €5,000 reduced off the Ford Kuga and €3,000 off the Ranger pick-up.
Meanwhile, Peugeot looks set to unveil price reductions later today to its 207 and 308 models. Prices for the 207 range have dropped by an average of €949 and by €2,330 across the 308 range. There are also specification increases to these models.
This follows a week where there were price reductions announced by Volkswagen, Toyota and Kia. Volkswagen announced 10-11 per cent price reductions on the popular Golf and Passat models as well as market leading 6.75 per cent APR finance rate through its own Volkswagen Bank.
Toyota announced details of price reductions to the Corolla and Avensis, with an innovative prize bonds incentive on Corolla petrol models. Kia also slashed prices of its already low-price cars, with up to €2,000 off some of their core models.
There is a worry that such dramatic price reductions will have a negative effect on residual prices. “Residuals for all used cars have been in freefall since July 2008 and we believe that price reductions like this are a pragmatic and realistic response to the current market and will help stabilise the cost to change which is the most important equation when consumers are shopping for a new vehicle,” Kia Ireland’s managing director James Brooks said
However, there needs to be an improvement in the availability of finance for new car purchases from the main lenders, with evidence pointing towards credit unions and savings as becoming increasingly more important for new car sales as lending institutions put more stringent conditions on financing.