Ford Mach E prices are going upFord Mach E prices are going up

News

Ford hikes car and van prices for 2022 as it cancels rental company orders to manage supply

  • Ford tells rental companies they’re unlikely to get cars they ordered
  • Firm hikes price of new cars and vans to counter rising material costs
  • Semiconductor shortage means firm is prioritising retail customer orders
  • Other car manufacturers expected to follow suit as manufacturing issues intensify
  • Huge reduction in rental cars could keep used car prices high for some time yet

Time 2 weeks ago

Ford has told rental companies that they will not be given any special terms on vehicles and that new car orders they had in place may be cancelled.

In a special video meeting with rental firms today Ford said it would be prioritising retail vehicles as a result of the semiconductor shortages.

The manufacturer has also put up prices of new cars and vans to counter the rising cost of raw materials.


The firm said it would honour prices for existing orders, but the cost of a Mach-E is rising by £1,200, S-Max and Galaxy models are going up £1,250 and a Focus will rise £500.

Van prices have been hiked further with some Transit models going up by as much as £3,720.

One rental company boss told Car Dealer that Ford said no preferential terms will be offered to hire companies worldwide for the whole of 2022.

‘I wasn’t surprised when they told us as I was expecting this to come from most manufacturers,’ said one rental company boss.


‘The fact there are going to be no terms for rental companies and orders are being cancelled is not great news, but not unexpected.

‘I’ve been telling anyone waiting for a rental or lease car that unless they have a build date or a registration then don’t expect that car to arrive.’

Ford confirmed to Car Dealer that as a result of the semiconductor supply issue it has been forced to ‘closely monitor the situation and adjust production schedules’.

A Ford spokesperson said: ‘Customer-sold vehicle orders will be prioritised, and we are working to improve the situation as quickly as possible. 

‘However, we and other experts throughout the auto and consumer electronics industries believe [the semiconductor shortage] will last well into 2022.’

Prices of new cars and vans are also rising but the spokesperson said the manufacturer would ‘honour pricing for existing customer contracted orders’.

‘On pricing, we are experiencing unprecedented market factors including material cost increases and supply challenges and therefore have to adjust prices in response to these cost pressures to maintain a viable business and enable us to continue to make investments if we are to transform our business and continue to progress its electrified future,’ added the Ford spokesperson. 

Ford price rises 

Build dates from November onwards

  • Transit V363 – up £3,720
  • Transit Custom MS-RT – up £2,310
  • Transit Courier – up £1,825
  • Ranger – up £1,350
  • Galaxy / S-Max – up £1,250
  • Mach-E – up £1,200
  • Puma – up £850
  • Focus – up £500
  • Kuga – up £350
  • EcoSport – up £250

Ford’s move is likely to be echoed by many other manufacturers in the coming weeks as they also look to juggle supply and keep retail customers happy.

Many experts have been predicting new car price rises, especially as consumers are often currently paying more for used models than they would be new, if they could order them.

Other car manufacturers have also axed orders placed by rental companies as they look to push production into more lucrative retail channels.

Peugeot is believed to have told rental companies they will be cutting back on supply too.

Retail deals are far more lucrative to car manufacturers as they have to sell to retail and lease companies at discounted rates.


The restriction is likely to ensure used car prices remain high, though, as much of the used car market is fuelled by rental cars.

Cap HPI head of valuations Derren Martin said: ‘A number of manufacturers have told us that they will have hugely reduced rental volumes next year. 

‘By my calculations there have been crica 250,000 less cars registered to rental companies over this year and last than would normally have been expected.

‘Rental companies are generally very disciplined and expert at remarketing cars, but any large volume reductions in short-cycle may well help tip the balance of supply and demand towards keeping values stronger than they may otherwise have been.’

Get more from Car Dealer

  • Premium stories
  • Used car data
  • Magazine early access

Toby Poston from the British Vehicle Rental and Leasing Association added: ‘The ongoing supply issues are currently the biggest challenge being faced by the industry, and it is a subject we are in constant close contact with our members on.

‘The BVRLA’s recent Business Impact Survey shows that extended lead times are having a more extreme impact on the supply of ICE cars and ICE vans, although there are certainly challenges across all vehicle types.

‘Rental companies are resilient and are working hard to ensure they are consistently able to meet the needs of their customers. We would advise customers to book early and be willing to compromise on what type of vehicle they get.’

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

More stories...

Advert
Server 190