Car giant Ford has been forced to put up prices as a result of the weak performance of the pound against other currencies.
Ford - The UK's top-selling car firm - is in a "battle for survival", and a spokesman said that average increases of 3.75 per cent would add up to £1,000 to the cost of a car, according to a report from the Mirror.
Fords' managing director for Britain, Nigel Sharp, said the weak pound had driven up the cost of importing car parts - and claimed their rivals would follow suit.
The move comes 24 hours after Honda UK staff were warned they could follow Toyota's lead by imposing a 10 per cent pay cut.
Mr Sharp denied Ford, which has already laid off 850 staff and introduced four-day weeks at one plant, is ripping people off.
He said: "It is regrettable but we had to do it to survive. We would rather sell one car for a profit than 1,000 at a loss.
"It's the same problem facing the vast majority of the industry."
Ford prices rise on April 1 and will add £50 to a Ford Ka and £1,000 to a Ford Focus Coupe convertible.
Ford Fiestas will go up 6.1 per cent and Ford Mondeos 3.3 per cent.
New car sales fell 22 per cent last month, the Society of Motor Manufacturers and Traders reported, though Ford suffered only a 12 per cent downturn.
Mr Sharp added this rise is "not the end of the story", hinting more rises could be on the way.
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