Car manufacturers raise prices despite industry collapse

Tue, 03 Feb 2009



Following a Government decision to bail out the car manufacturing industry by GBP 2.3 billion, car companies Ford and Vauxhall have decided to increase the price of their vehicles by 5 per cent.

Ford announced price increases of 5.2 per cent on Ford Focus, whilst Vauxhall are set to announce similar increases across their range. The decisions were instantly criticised. John Thurso, Lib Dem business spokesman, reportedly commented: "As I understand it, the inability to sell cars is the problem. I would have thought the last thing to do in difficult trading conditions was to put prices up."

Research director at Taxpayers Alliance, Matthew Sinclair, was reported in the news making an extremely salient point: "If the Government wants to help car makers, it can do so in a way that helps ordinary motorists by cutting road tax and allowing ordinary people the chance to help manufacturers the old-fashioned way, by buying their cars ."

A Vauxhall spokesman was reported as blaming currency fluctuations, commenting: "We are buying in euros and selling in sterling, which is a huge challenge because the pound/euro relationship has gone wonky. We have to keep this business afloat and we have to make some money ."
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