When Brexit was first announced, the pound coin took a major hit in terms of value. The car industry was affected negatively, but in some ways people have been able to use the weak pound to their advantage. Irish car buyers have benefitted, as spending on UK car imports has increased by 14% compared to 2017 and risen to 66% from the pre-Brexit referendum level.
These findings have been carried out by foreign exchange specialist Fexco Corporate Payments. The 3000 transactions analysis comes days after the euro hit 89.5 p against the pound, which is the highest level for nearly eight months. Fexco also noted a 49% rise in the number of cross-border car purchases between 2016 and 2018.
In recent months, the registration of new cars in the UK has decreased. Yet the previous boom period has led to an extensive supply of used cars for Irish motorists to choose from. Head of dealing at Fexco Corporate Payments David Lamb said “on a purchase as large as a car, exchange rates can be a dealmaker or a dealbreaker. Two years on from the UK’s vote to leave the EU, thousands of Irish car buyers – both individuals and garages – are still capitalising on the weak pound.”
“The UK has a much greater supply of used cars than Ireland, so all things being equal, a British used car should cost less than a similar model on this side of the Irish Sea. Historically the cost – and red tape – of importing a UK-registered car into Ireland put off all but professional dealers or the most committed individual motorists. But sterling’s continued weakness has shifted that calculus and is nudging even more Irish car buyers to look to the UK for their next car.”
“In 2015 the euro-pound exchange rate averaged 72.6p, while in the first six months of 2018 it averaged 87.9p, before surging past 89.5p last week. But with the UK widely expected to raise interest rates in August, sterling could strengthen in coming weeks – meaning Irish buyers planning to import a car from the UK may want to lock in the current favourable exchange rate by using a forward contract.”
The data that Fexco put together is an indication that the UK car industry can bounce back in a post Brexit-world.
