LONDON -- Ford Motor, General Motors' Vauxhall division and Nissan are among automakers that have raised prices for their new cars in the UK in response to the pound's collapse following the country's vote to leave the European Union.
General Motors Europe President Karl-Thomas Neumann said prices of Vauxhall models will rise by at least 2 percent but the hike still will not be enough to recoup money lost after the pound's fall against the euro.
"We are taking other measures, even to the point of reducing some production," he said at the Paris auto show last week.
Nissan increased prices by 1.5 percent to 2 percent starting this month, Nissan Europe's head of sales and marketing, Guillaume Cartier, said at the show. This was the "first wave" in price rises, he said. He warned of a second wave as automakers try to recoup revenue following the pound's collapse. "After that we will see if the pound stabilizes," he said.
Ford raised prices by around 1.5 percent last month, the company said. Honda and Suzuki are hiking prices this month, JATO Dynamics market researchers reported without giving an amount.
PSA Group was the first to react to the weaker pound when it increased prices by around 2 percent at the beginning of August.
Price rises will hurt car sales in the UK, Europe's second largest market after Germany, JATO Dynamics analyst Felipe Munoz said at the time of the PSA price rise. However, Nissan's Cartier said the prices rises will be partly offset by UK's low interest rates, which reduces the cost of finance. More than 80 percent of the UK's cars are bought with finance packages.
GM's Opel unit, which also builds Vauxhall cars sold in the UK, said in August that it was reducing working hours at its Ruesselsheim and Eisenach plants in Germany as it tries to recover money lost because of the weaker pound. The Insignia midsize model is built in Ruesselsheim and the Corsa subcompact is produced in Eisenach.
In July, GM said it sees $400 million of potential headwinds in the second half triggered by the Brexit vote, threatening its goal of returning its European operations to profit this year. GM's European supply chain has been hit by the pound's decline against the euro.
The UK is GM's biggest market in Europe by new-car sales, greater even than Germany. The automaker sold 202,956 Vauxhall cars through August, down 4 percent, compared with 185,738 sales of Opel models in Germany, up 8 percent, according to official registration data. Vauxhall is the second best-selling brand in the UK after Ford. Vauxhall sales fell 4.9 percent in September in a UK market up 1.6 percent.
Ford said in July that Brexit had already cost the company $60 million because of the pound's slump. It expects to lose $200 million in Europe this year and $400 to $500 million next year.
Nissan CEO Carlos Ghosn said at the Paris show that the automaker may ask the UK government for compensation as a condition for making new investments if Nissan has to pay tariffs to export from the UK to the EU.