Or maybe it is because of their financial situation.

https://www.forbes.com/sites/neilwinton/2019/01/10/ford-motor-stays-in-loss-making-europe-for-now/#48678dde6606

"We forecast Ford Europe to post an accumulated loss of $3.6 billion from 2019 through 2021 with increased losses each year. By 2021, our forecast of Ford Europe's Adjusted EBIT margin is negative 4.5% which we estimate would make Ford the least profitable (manufacturer) in that market,"

 

Or maybe it is just normal practice for the price to increase over the years, inflation + more R&D costs fixing the niggles early models have etc...

 

Release car at headline rate, get the prices out there. Then increase to target price once the noise has died down. Feels like good business sense although annoying as a customer. Also, it's been a very popular car with great reviews, I'm not surprised they've attempted to increase the price. Ford make no money on Fiesta or Focus so they need to do something or the cars/Ford won't exist in Europe in the future.

 

The RS jumped up £1,000 twice in two years.

I think Ford go in at a more "sensible" rate to make sure they get sales with a headline price.

As the sales increase then so does the price as they balance supply and demand.

Plus as Alec says, costs increase...

 

The performance pack has been at £925 since at least mid-December as we ordered at the end of December and were charged this.

 

You don't think their dire financial postion in Europe has anything to do with it?

Or maybe it is just normal practice for the price to increase over the years, inflation + more R&D costs fixing the niggles early models have etc...

 

You don't think their dire financial postion in Europe has anything to do with it?

No, because a lot of previous models have undergone the same price increases over their years of sale.

 

As above, its nothing to do with the perceived financials, its market forces that impact the cost, price of raw materials, labour costs, R&D, fixed assets costs, advertising, cost of borrowing, etc etc etc

Otherwise we would still all be paying £1000 for a car like back in the 70s.

 

Ford maybe making a slight loss but I don't think this is the reason why they are increasing, think it is more to do with price changes and probably to slow production to manageable levels knowing they can still sell what they produce but the lowest 10% who would have been on a waiting list are now removed. There will however be "incentives or sale" when the need arises in order to keep the stock flowing.

I think anyway the losses are in most businesses part of the deal nowadays wether that be a car or a PS4 or even a coffee machine..... The companies know they will make there money back in the following year or two on servicing and parts, then the following years will simply be profit.... (you don't really think those 4 catches that hold the side skirts on are really costing Ford £25 to make when I can buy a similar catch (though not suitable for the task)for £0.99 on amazon?).

 

Ford maybe making a slight loss but I don't think this is the reason why they are increasing, think it is more to do with price changes and probably to slow production to manageable levels knowing they can still sell what they produce but the lowest 10% who would have been on a waiting list are now removed. There will however be "incentives or sale" when the need arises in order to keep the stock flowing.

I think anyway the losses are in most businesses part of the deal nowadays wether that be a car or a PS4 or even a coffee machine..... The companies know they will make there money back in the following year or two on servicing and parts, then the following years will simply be profit.... (you don't really think those 4 catches that hold the side skirts on are really costing Ford £25 to make when I can buy a similar catch (though not suitable for the task)for £0.99 on amazon?).

Need to sell a LOT of catch's to recoup $3.6 billion

 

They probably are the same catch as my side skirt is coming away!

 

Need to sell a LOT of catch's to recoup $3.6 billion

The comment was more referring to servicings and general parts wear and tear and considering EU in general had over 15 million car sales in 2017 of which Ford would have had a good share, then ad in to that that these servicing and sales continue year on year until the car is scrapped or the owner stops buying genuine parts.... they IMO make a fair bit on after sales......

.... I also would not put it past them to be "paying" Ford US for the privilege to use the name in EU (or in other words moving the money out of Europe to show a NET loss and avoid tax whilst Ford USA gives enough money back to "support" then in their time of need.....

 

Trumps new laws on companies having sites outside of the US has damaged Ford in Europe a bit, it meant who i work for is technically Ford Technologies Ltd instead of Ford Motor Company Ltd. Ford globally makes billions of profit but their main loss is Europe and Europe has 2 large development centres, Merkenich in Cologne, and Dunton in Essex. These two sites do a lot of the prototype work so we never made money only spend it.

The mk8 ST has always been sold way too cheap for the company so an increase was on the cards.

 

Trumps new laws on companies having sites outside of the US has damaged Ford in Europe a bit, it meant who i work for is technically Ford Technologies Ltd instead of Ford Motor Company Ltd. Ford globally makes billions of profit but their main loss is Europe and Europe has 2 large development centres, Merkenich in Cologne, and Dunton in Essex. These two sites do a lot of the prototype work so we never made money only spend it.

The mk8 ST has always been sold way too cheap for the company so an increase was on the cards.

So you are saying that it was the right decision to buy it the first available moment.

 

The price has gone up and the discounts have gone down. My car would be £1400 more expensive now compared to end of August.

 

Trumps new laws on companies having sites outside of the US has damaged Ford in Europe a bit, it meant who i work for is technically Ford Technologies Ltd instead of Ford Motor Company Ltd. Ford globally makes billions of profit but their main loss is Europe and Europe has 2 large development centres, Merkenich in Cologne, and Dunton in Essex. These two sites do a lot of the prototype work so we never made money only spend it.

The mk8 ST has always been sold way too cheap for the company so an increase was on the cards.

Way too cheap? I disagree. Ford have to market it at around the price of the competition - it's clearly the best drivers cars in it's class but they need to attract buyers who were looking at say a Polo GTI. VW have a 'perceived' quality advantage over Ford so if the ST was priced way above the Polo, Ford may well lose sales. Also, with a fully spec'd ST3 the wrong side of £25k now, it's not far off a Hyundai i30N with more space, trick suspension, 75bhp more & a 5-year warranty. Again, higher pricing would lose customer IMHO.

 

Way too cheap? I disagree. Ford have to market it at around the price of the competition - it's clearly the best drivers cars in it's class but they need to attract buyers who were looking at say a Polo GTI. VW have a 'perceived' quality advantage over Ford so if the ST was priced way above the Polo, Ford may well lose sales. Also, with a fully spec'd ST3 the wrong side of £25k now, it's not far off a Hyundai i30N with more space, trick suspension, 75bhp more & a 5-year warranty. Again, higher pricing would lose customer IMHO.

He means too cheap as in, it makes a loss.

 

He means too cheap as in, it makes a loss.

Yeah I get that but unsure why. Are Ford vastly more inefficient at making this car compared to the competition who can seller their products for a similar price but don't make a loss?

It might be too cheap for them to make a profit but the point I was making is that they are constrained by market price & competition.

 

The complexities of pricing a car are so detailed and with major variabilities on each market it sells in, unless you are involved deep within the financial realms of Ford, no one has the slightest clue what the costs are to develop a model, you can fill a book at the variables that surround that, without all the other considerations such as a halo product on the range that entice buyers to buy lower spec models etc etc.

Just sticking out a comment its way too cheap, does not understand the running of a major global corporations financial model.

 

Good point kenthammer.

One could reasonably speculate that certain aspects of their operation use a lot of money, their logistics costs in Europe for example.

They have 2 factories in the UK that make petrol and diesel engines. Those engines are exported to EU countries (tariff free given we are in the EU), put into the vehicles and then those completed vehicles are imported back into the UK or exported to other EU destinations.

Large savings could be made if their engine plants were in the same country as their production plants, significantly reducing logistic costs. Their operating model in the EU is very inefficient in terms of logisitc costs on the face of it and if the UK leaves the EU they will have to pay that import/export tariff whenever goods cross the border between a non-EU and EU country. This is why Ford UK do not want the UK the leave the EU without a trade deal granting them tariff free acess / free movement of goods, it will cripple them futher. However, I feel Ford only have themselves to blame and are using Brexit as a front to mask their inefficient operating model.

 

Yeah I get that but unsure why. Are Ford vastly more inefficient at making this car compared to the competition who can seller their products for a similar price but don't make a loss?

It might be too cheap for them to make a profit but the point I was making is that they are constrained by market price & competition.

Loss leaders are a major part of business.

They keep the business in the forefront of peoples minds with the intent of gaining and retaining custom.

They also lead the way for innovation and improvement.

Ford could have released the Mk8 with just a different engine and some slightly different bumpers and it would have sold...

Things like the innovation of the new rear spring set up would have cost a fortune in R&D alone...then there is the new interior...new body panels...new machinery/coding on the production lines...add all those changes up and there is massive cost involved, yet each Mk8 ST is only a couple grand more than the previous generation and inflation has risen in the 6 years since the Mk7 came out that much alone really.

 

Loss leaders are a major part of business.

They keep the business in the forefront of peoples minds with the intent of gaining and retaining custom.

They also lead the way for innovation and improvement.

Ford could have released the Mk8 with just a different engine and some slightly different bumpers and it would have sold...

Things like the innovation of the new rear spring set up would have cost a fortune in R&D alone...then there is the new interior...new body panels...new machinery/coding on the production lines...add all those changes up and there is massive cost involved, yet each Mk8 ST is only a couple grand more than the previous generation and inflation has risen in the 6 years since the Mk7 came out that much alone really.

Completely agree with you but all the Fiesta competitor cars in this segment have the same issue (when a new model is released) so you could say that all the cars in this segment are too cheap, however it's what the customer is willing to pay at the end of the day.

 

Ford manufactures its most popular passenger vehicles (Fiesta & Focus) in the most expensive country in Europe (Germany). That, combined with the high levels of bureaucracy and inefficiency, are why it makes no money. The commercial vehicles are made in Turkey and are profitable. The prices of the cars can't go up because customers won't wear it, yet there are some senior staff who genuinely feel Ford can compete for Audi/BMW/Mercedes/Ranger Rover customers money and so push the higher car prices. Nobody want's to deal with costs because it means dealing with the German unions who are incredibly strong and so the cycle of not making any money in Europe continues.

 

It's not just everyday cars which have this issue.

The Veyron was a loss leader too. The people able to afford them could certainly pay more too, yet they were priced where they were...with almost nothing else at the same price point up in the clouds.

 

Cheeky little price increase on paint colour and B & O this month, found out when my mate ordered an ST3