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Conned-big people
Page 70
Page 71
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Ford is keeping a tight control over the emergence of the Transit Connect into the used market. CAP editor David
Hill looks at how this keeps Escort values up.
Back in October we reported in Red Book editorial on the fortunes of the Ford Escort van following the introduction of the Transit Connect. Our research revealed that a commonly held assumption was wrong: namely, that the appearance of a superior replacement model is bound to reduce the value of the outgoing model.
This subject is worth revisiting because the Escort continues to sell well, thanks to a combination of the usual factors that make it a successful van and Ford's effective control over the supply of used Connects in the marketplace.
We originally reported that the introduction of the Connect was concerning a lot of dealers who feared its success would hit residuals as used models flooded onto the market. The balance of supply and demand is often a delicate thing and whenever one substantially outstrips the other, prices will always move.
In the case of the Escort and Connect, however, Ford has handled the situation well by enhancing the specification of the last Escorts to stimulate demand while controlling —or more precisely preventing— the supply of Connects into the used market.
Choices
As a result the Connect was initially too expensive for many used buyers who were nevertheless comfortable with a Ford badge and were content to go for the cheaper but well proved Escort.
Looking at the situation today we see that Escort residuals remain strong for a van that has not been built for 18 months, while the Connect remains a rare commodity in the open market.
Maintaining control of a new vehicle as Ford is with the Connect certainly pays dividends. Heavy discount ing on new vehicles has been avoided, along with buy-back deals. Careful control of disposals through Ford Direct and a closed sale programme is also paying off.
These closed sales are run by RCA, which holds the details of all Ford dealers in the country and also invites other select 'bluechip' buyers with the manufacturer's blessing.
Unlike most vehicle auctions the prices realised at these sales often rise towards the end. It seems this phenomenon is prompted by the arrival of car dealers for a not-so-randomly arranged car sale immediately following the van sale. Car dealers generally work on lower margins than their specialist van counterparts so they are often content to pay more for their vans while matching the final retail price. Those Connects that do escape the closed sale environment, via finance repossessions, for example, still command top prices — again, because of rarity value.This in turn helps to keep the Escort on firm ground, and we expect this good performance to continue as long as strict control is maintained over supplies of the Connect.