Brexit: Weak sterling could spark rise in cost of UK cars on market here
Fears weak sterling could spark rise in UK cars on market here
Published 22/06/2016 | 02:30
Major uncertainty surrounds the impact on used-car prices here should Britain vote tomorrow to leave the EU.
In that event, some in the motor industry here fear there could be a big increase in the numbers of lower-cost used imports on the back of an anticipated weaker sterling.
Imports fell over the past couple of years because sterling had been so strong.
Now if imports get cheaper due to a weaker UK currency, there could be serious knock-on effects on the residual values of 'home' cars on the Irish secondhand market - at least in the medium term.
No one is exactly sure what will happen - and obviously a vote to stay in will greatly allay fears of such a development. There is even talk of tariffs and quotas.
The uncertainty underlines how widespread the ramifications of a UK exit would be and the sense of potential crisis it is creating.
All the big car manufacturers globally have been active in warning of severe consequences across the board.
Toyota estimated that Brexit could lead to levies of as much as 10pc on the cars it builds in Britain. In a letter to its UK workers, it says Brexit would challenge it to cut costs or make its cars more expensive.
The Japanese giant exports almost 90pc of the vehicles it builds in the UK. Reports say three-quarters of those cars are sold in the EU.
The letter was signed by two of Toyota's UK manufacturing executives and a trade union representative. It says: "We will face significant business challenges as a result of a decision to withdraw from the EU."
It insists that it remains committed to its UK factories and employees - last year it built 190,000 Avensis and Auris cars at its Burnaston plant. But a 10pc rise in prices at a time of severe competition could have major implications for future long-term planning.
Several other carmakers and suppliers have voiced "widespread concern" over the prospect of a British exit.
Leaving the EU would be "highly damaging" and make the carmaker's products less competitive in Europe, Jaguar Land Rover chief Ralf Speth warned on Monday.
And Nissan chief Carlos Ghosn has said that staying part of the EU makes sense for jobs, trade and costs.