Ford closes gap between P11D and transaction price

Called ‘Bluetag pricing’, the initiative was introduced last year in an attempt to bring transaction process closer to list price.

The objective is to improve profits for the manufacturer while lowering the price on which benefit in kind taxation is calculated for company car drivers. Employers’ Class 1A national insurance would also be reduced.

“We are making progress but it’s continual and gradual improvements,” said Ford of Britain managing director Mark Ovenden. “We have to educate fleets – people are conditioned to believe there is always a deal.”

He added: “If we don’t get them closer, if there’s a huge gap, then the manufacturer doesn’t win, the dealer doesn’t win, the driver doesn’t win and there is pressure on residual values. The only beneficiary is the government in higher tax.”

However, while Ovenden believes there is a clear case for aligning its prices, he also points to the influences of competition. “If they are promoting big discounts it has an impact on the market,” he said.

“I believe all manufacturers would like to do this, but some are better at it than others.”

Meanwhile, as rival manufacturers such as Kia, Hyundai and Toyota have moved to extended warranty offers, Ford does not rule out extending its own three-year deal.

“We have extended service intervals and this is a continual process,” Ovenden said. “We are also always looking at our warranty. But Ford is still competitive [for now].”

More pressing, he believes, is the need to tackle to increasing commoditisation of cars in the fleet sector. The solution is to have the brand and its products working in the right way.

“The stronger we can make our product, the easier it is to overcome this,” he said, although he adds: “In the UK, it’s survival of the fittest at the moment in fleet.”

Courtesy of FleetNews