Ford is raising its car prices by an average of 3.7% because it is "in a battle for survival", the firm said.
Ford of Britain managing director Nigel Sharp said upping prices on April 1 was the only option and warned that 95% of car companies were likely to do the same thing, predicting Vauxhall could do it on April 3.
He said that most of Ford's costs were in Euros and currency margins were a big factor in the price rise.
The increase will send Ford's biggest-selling model, the Fiesta Zetec, up to £13,095. A new Ford Ka will now cost £7,995. The on-the-road price for the same vehicle in 1999 was £8,020 which in real terms would now be £9,424.
But Mr Sharp denied the company was ripping people off. "It is regrettable that we are putting prices up but this is a battle for survival. We would rather sell one car for a profit than sell 1,000 at a loss," he said.
"This is not something we wanted to do. We had to do it to survive in business. We think it's the same problem facing the vast majority of the industry."
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