PSA group are the first manufacturer to raise prices directly due to the UK's decision to leave the E.U.

PSA Group has raised prices for its new cars in the UK after the pound plunged following the country’s decision to leave the EU.

Other automakers including Fiat and Nissan have warned that car prices will have to rise to counter the pound's fall but PSA is the first to do so,

PSA increased UK car prices for its Peugeot, Citroen and DS brands on Aug. 1.

A Peugeot brand spokesman said the increase partly reflected the pound’s 10 percent fall in value against the euro following the Brexit vote on June 23. “We have to anticipate fluctuations in currency,” he said.

Peugeot didn’t give an average increase but in one example the entry 308 compact car rose by 435 pounds ($567) to 15,930 pounds, a 2.8 percent increase.

Citroen and DS prices rose by an average of 2 percent, a spokesman for those brands said. The price increase was planned before the recent exchange rate fluctuations, the spokesman said.

PSA’s three brands have a combined 7.24 percent share of the UK market based on sales in the first seven months. The French automaker has no local production to offset currency variations and imports all its cars into the country.

UK industrywide passenger car registrations increased 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 on Thursday.

Price rises would “hurt car sales” in the UK, Europe’s second largest market after Germany, JATO Dynamics global analyst Felipe Munoz said.

Automakers are still assessing what the UK’s exit from Europe means for business there, he said. “However the first effect is on the pound, and the price rise is the easiest and quickest way to deal with that,” he said.

Renault-Nissan CEO Carlos Ghosn last week told journalists he had “no doubt” prices would have to rise in the UK.

Fiat brand's UK chief, Sebastiano Fedrigo, warned earlier this month that price rises are inevitable but said most companies are waiting to see if the pound stabilizes.

Automakers have warned that Brexit is hitting the profitability of their European operations.

Ford Motor, the UK's top-selling brand, said last month 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.

General Motors said it was considering cost cuts in Europe to offset up to $400 million of potential headwinds triggered by the Brexit vote. GM is seeking to return its Opel and Vauxhall to a full-year profit after years of losses.

Nick Gibbs

Automotive News Europe

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Honda to increase the cost of its model range by, an average of 2.3%, one of the largest increases of recent times.

Honda UK has today announced a price rise for its car range.  Coming into effect from 1^st December for the HR-V and from 4^th January 2016 for the Civic hatchback, Civic Tourer, CR-V and Jazz, prices are set to rise 2.3% on average across the line up.

With pricing for the Japanese automakers products remaining largely unchanged since January 2014, Honda was keen to stress the market has moved substantially since then with one competitor increasing prices 3% in the last 12 months alone.

Philip Crossman, Managing Director of Honda UK, commented: “In the wider context we must ensure industry price competitiveness.  To achieve this we have undertaken a comprehensive review of our product pricing over the last three years to understand where Honda sits in comparison to our main competitors and have determined that we need to raise prices accordingly.”

At launch the new Jazz had a slight price decrease, with prices not rising since January ’14.  Prices for the SE and EX Jazz will rise by 2.3% on average while the entry model remains the same at £13,495.  

The CR-V had a slight price increase at the start of this year when the mid-life model change occurred; from January 2016, prices will rise by 1.9% starting at £22,770 for the 2.0 S i-VTEC 2WD.

The Civic Hatchback and Civic Tourer will see a price rise of 2.3% having not seen a rise since January ’14.  Indeed the mid-life model change saw a price decrease of up to £1,500 across the range.  The 1.4 S i-VTEC entry model will now start at £16,470.

Pricing for the HR-V, which launched in September this year, will rise by 4.4% on average with the 1.5 i-VTEC S starting at £18,495 to be more in line with competitive prices.