LONDON -- UK car prices are certain to rise next year as a result of the pound’s slump following the country’s decision to exit the EU, said Fiat brand's UK chief, Sebastiano Fedrigo.
Automakers are waiting to see if the pound stabilizes before raising prices, Fedrigo told Automotive News Europe. But he said it was inevitable that prices would increase. "I think it will happen for sure next year but when I don't know," he said. "Nobody wants to be the first."
PSA Group last month indicated it would likely need to raise prices to defend the profitability of its sales in the UK.
Industrywide UK sales rose by just 0.1 percent in July with private sales declining by 6.1 percent as consumer confidence fell, according to data from industry association SMMT released Thursday.
Fiat’s July sales plunged by 25 percent, reflecting the brand’s stronger appeal to private buyers compared to fleet and business customers. Over half the brand’s UK sales are the Fiat 500 minicar.
The UK car market is likely to shrink after months of record growth, predicts analyst firm LMC Automotive. “We continue to assume economic headwinds will hit the UK car market over the remainder of this year, and beyond,” the company said in a statement on Thursday.
Ford Motor, the UK's top-selling brand, said last week that Brexit has already cost the company $60 million because of the pound’s slump in value. It expects to lose $200 million this year and $400 to $500 million next year due to Brexit, Chief Financial Officer Bob Shanks said.
The UK is Europe’s second biggest market after Germany. Seven-months sales in the market rose 2.8 percent to 1.6 million, the SMMT said.
The pound has fallen 10 percent against the euro following the Brexit vote in June and by 12 percent against the dollar.