The French brand is unlikely to be the last to increase prices there.
The fallout from Britain’s decision to leave the European Union continues to send ripples through the global auto industry, and PSA Group is the first company to raise prices there as a strategy to offset the losses from the weaker English pound. Models from Citroën, DS, and Peugeot are now an average of two percent more expensive as of August 1, according to Automotive News Europe.
Since the Brexit at the end of June, the pound has lost 10 percent of its value against the euro. The change especially affects PSA Group because the company imports all its vehicles into the country. “We have to anticipate fluctuations in currency,” a spokesperson told Automotive News Europe about raising the prices.
If more companies decide to raise prices, analysts predict a significant drop in vehicle purchases in Britain. In 2016, there could be 120,000 fewer deliveries in the country, and the figure could balloon to 900,000 lost sales through the next two years.
Other automakers are facing tough choices about how to offset losses in Britain. For example, Ford recently reported $60 million in losses in the second quarter due to Brexit and estimated the vote would cost the company $500 million in 2017. Jaguar Land Rover, which builds many models in the country, could lose $1.47 billion because of higher export taxes and tariffs.
Source: Automotive News Europe