Prices for the new Ford Mondeo match or undercut the old model's in the key markets of Germany and the UK - even though the new car is better equipped.
Ford of Europe can now set prices for new vehicles independently, without having to review them with Ford in North America. Nick Scheele, Ford of Europe chairman, said this was due to Ford of Europe's newly autonomous business structure.
Ford wants to keep the new Mondeo's prices at or near the levels of the old model, while adding more features. The new Mondeo has more standard equipment, including an intelligent safety system with front, side and side curtain airbags.
The major price differences are in the UK, where car manufacturers have been engaged in a price war. The new Mondeo LX with a 1.8-liter, 125hp gasoline engine will be priced at 14,595, compared with 16,000 for the old model. Ford announced price cuts on its entire UK range earlier this month.
In France, Italy and Spain, the new Mondeo is priced slightly higher than the old model.
'The fact that they've not been greedy on pricing is key,' said Karl Ludvigsen, chairman of Ludvigsen Associates, an industry research and consultancy firm in London. 'I think that's very good news.'
The new Mondeo goes on sale next month in Germany and the UK. The car will be launched in other European markets in early January.