FORD has slashed prices of its premium Falcons by more than 10 per cent in a bid to keep the VE Commodore at bay and fight off newer challengers like the Toyota Aurion V6.

The price-cuts – 12.4 per cent for the XR models and 12.1 per cent for the Fairmont Ghia – are part of a Blue Oval strategy to keep Falcon viable and vital in the large car market until the next-generation E8 Falcon arrives in March, 2008.

Prices for the XR6 and Fairmont models remain the same while the XT and Futura models have risen 0.3 per cent.

Ford has also added a "Euro Sports Package" to the lineup for the token introductory price of $250 on XT, XR6, Futura and Fairmont sedans in answer to Holden’s standard fitment of ESP on its Commodore range.

The ESP deal includes the six-speed ZF automatic, dynamic stability control and 17-inch alloys.

Ford claims the combined retail price of this equipment is $3900. The ZF six-speed auto is $1500 as a stand-alone option.

Apart from the price, the six-speed automatic Falcon XT also makes gains in fuel economy over the four-speed automatic BF Falcon of more than six per cent with an ADR 81/01 economy figure of 10.2L/100km.

Fuel economy on BF MkII Falcons with four-speed automatics has also improved through some software changes that have delivered a fuel economy improvement of two per cent, dropping 0.2L/100km to 10.7L/100km.

Ford has recalibrated software on its dedicated E-Gas LPG models, which now account for more than 25 per cent of Falcon sales, which has also delivered economy improvements.

E-Gas engines have gained a five per cent improvement in fuel consumption, with the official ADR figure dropping 0.8 l/100km to 15.1 l/100km.

Ford president, Tom Gorman, said the ESP offer was designed to lure private buyers and would run until the end of the year.

Mr Gorman admitted that Ford had taken strategic action to reposition some of its models "in order to ensure that the competitiveness of our price offering is as customer focused as the design changes we have made to the vehicles".

The BF MkII Falcon gains some visual tweaks inside and out but the suspension and steering carries over unchanged. Bluetooth connectivity will also be available from December.

Mr Gorman conceded the price cuts were designed to signal Ford’s intention to remain prominent in the big six game.

"I think there are two things here going on there," he said.

"One is that we recognise that we need to be competitive and if you look at what is happening to the large car market it’s been a whole series of things – petrol prices, exchange rate activities - a little bit is that there hasn’t been a lot of product in the segment.

"But from a price competitiveness standpoint I think we also recognise that continuing to offer great value for money is what’s going to help expand the segment.

"So we decided to do that with a particular focus on the private buyer also, when it comes to the fleet deal I think it’s a great deal and great value for money."

Asked why the ESP deal was not standard across the range, he said Ford wanted to understand the pulse of the customer "so by putting it in a pack like the Euro Sports Pack, I think you can figure out if it has some traction with the customer or not".

"A lot of people would say well $250, why bother, why not give it away?

"But there is a psychology that applies here that if you give people something for nothing, that’s what it’s worth. I think you have to remind people they are getting a great deal of value and there’s a lot of content."

Although the deal is available until the end of the year, Mr Gorman said there was scope to continue the offering in the new year, depending on the competitive pressures from its key rivals.

Visually the Falcon gains more "jewellery" on the exterior while changes to the front bumper design have delivered improved aerodynamic performance.

Most of the changes have occurred on the Fairmont Ghia, which gains a "European-inspired" sports luxury exterior look, tapered bonnet, chrome grille, jewelled fog lights and front bumper finishes, and new seven-spoke 17-inch alloys.

An exposed chrome exhaust, XR-style side skirts and rear bumper, new 17-inch alloys, revised "Ghia" badging complete the up-spec car’s package.

Inside, the Ghia gains a black chrome instrument cluster, "silverline" steering wheel, chrome air vent highlights and black onyx Interior Command Centre similar to the Territory Turbo, as well as China Beige leather seat trim, suede feel seat backs and door trims, and new front seat headrests.

Fairmont, Futura and XT, Ute XL, XLS and RTV also receive modest upgrades.

All feature a new tapered bonnet, more aggressive front bumper design, along with revised rear bumpers on sedans. Depending on the model, the headlights gain dark or chrome accents.

XR and XR utes get new "Chicane" metallic yarn seat trim, new instrument cluster design and satin alloy inserts in the instrument panel.