Ford will reduce the list prices by an average of 11% on its medium and small cars from August 2.

Ford is the traditional price-setter in the UK car market. It had big price rises through 2009 adding up to a whopping 20% over the course of the year.

Kevin Quigg, Ford dealer council chairman, said: "There was an immediate effect in the showroom as a result of the lower list prices on large cars. Ford dealers are delighted to see the company continuing to lead the market by applying the initiative across the entire Ford car range."

Seasonal promotions featuring discounts of up to 15% were first introduced across the Ford UK dealer network to maximise trade in the critical March sales month.

In April, these promotions effectively became permanent on Ford large cars and now they have been applied across the entire Ford car range, which the company introduced to make the pricing and value of models “more transparent to customers”.

Nigel Sharp, managing director Ford of Britain, said: "The traditional way that the car industry has operated in the UK – with high recommended list price matched to high discounts – is causing confusion for consumers.

"Together with our dealer partners we are determined to change that formula and make the whole purchase process more transparent and the value of Ford cars more obvious."

At the same time as reducing the recommended list price on its small and medium cars, Ford is reducing dealer discounts. This completes the action started with large cars in April, called "Blue Tag pricing", which Ford said at the time it aimed to extend across its entire car range.

From August 2, the recommended list price of a Ford Ka Studio will be £7,995; the recommended list price for a Ford Fiesta Studio will be £9,995, the recommended list price of a Ford Focus Zetec will be £15,545 while the recommended list price of a Ford Kuga Titanium will be £22,495.

This compares with recommended list prices of £9,360, £11,645, £18,345 and £23,795, respectively, for the outgoing models.

• To read more on Ford's pricing structure and plans for the remainder of 2010 see AM's next ezine on July 7.