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Extended: Employee car discounts cause dealer resentment

Ford retail dealers are increasingly concerned about their manufacturer’s heavily discounted sales to employees and their families.

The main reason for resentment, they say, is that relatives can buy cars for a lower price than they pay a main dealer for supplied vehicles.

Industry sources believe that more than 70,000 cut-price cars are sold each year through manufacturers’ discount schemes. Last year, Ford registered 30,737 cars through its employees’ Privilege scheme, representing 9% of its UK total of 347,551.

A Ford retail dealer says: “We are being denied thousands of retail sales, which is immoral of Ford. Stories circulate about Privilege vouchers changing hands in pubs and we are looking to the manufacturer to act.”

The volume of sales to employees through some dealerships close to manufacturing plants became an issue in the final months of MG Rover as the management struggled to maintain volumes of registrations.

They arose again as unions said sales would suffer because of this year’s production cutback at Vauxhall’s Ellesmere Port plant, and next year’s closure of Peugeot’s Ryton, near Coventry, assembly site.

Sir Digby Jones, who steps down as CBI director-general at the end of this month and becomes an adviser to Ford of Europe in October, also says the Ryton decision could hit Peugeot’s sales in the UK.

He believes consumers like to support companies that invest in their communities. Unions have mounted campaigns against Peugeot and Vauxhall, suggesting sales will suffer because they are cutting back on UK production.

One Ford retail dealer says: “Digby Jones has confused loyalty to a manufacturer with the availability of an employee discount.”

All Ford of Britain employees are entitled to buy up to three discounted car in every nine-month period for themselves or members of their family, from spouse or partner, to grandparent or step child. Discounts vary from 5% for a StreetKa to 25% or 30% for a mainstream Focus derivative.

“Stories about vouchers being handed around in pubs are wrong,” says a Ford of Britain spokesman, “We have tightened the rules to the extent that some employees have complained.”

The retail network may soon feel even more resentful. Ashley Winter, chairman of the Ford dealer council, says: “We are talking to Ford about how we can grow the Privilege volume because our members with dealerships close to plants have built their business plans around it.”

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