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Brexit could affect Australian new car prices

As the pound continues to tank, the yen becomes a popular "safe haven" currency.
Joshua Dowling
CarsGuide

1 Jul 2016 • 3 min read

It's early days yet for the fallout from Brexit but there may be a completely unexpected impact in Australian car showrooms.

If the pound continues to tank and the yen becomes even more popular as a "safe haven" currency amid all the uncertainty - as some financial pundits are predicting - then we could feel the shock waves here.

As we have reported, the Australian dollar has fallen by 18 per cent over the past year against the yen.

Another sustained increase in the value of the yen has the potential to flow on to new-car prices by the end of the year, given more than a third of cars sold in Australia are from Japanese brands, which account for five of our Top 10.

When it comes to the car business, neither the departing country nor the continental bloc wants the other to falter.

As for British-built cars, they could get cheaper if the pound doesn't recover.

Britain is better known for building luxury cars such as Mini, Range Rover, Jaguar, Bentley and Rolls-Royce but its factories also turn out more mundane models. Nissan Australia brings in two compact SUVs, the Qashqai and Juke, and the Honda Civic hatch is also built there.

The reborn Holden Astra, due on sale towards the end of the year, will come to us from an Opel factory in Britain.

Meanwhile, industry analysts expect Britain will establish free-trade deals with the various car-making countries in the European Union because it buys so many of their exports as well as shipping about 800,000 cars to Europe each year.

The Brexit breakup is rippling around the global economy but when it comes to the car business, neither the departing country nor the continental bloc wants the other to falter.

Car manufacturers will be lobbying for the status quo.

Do you think Brexit will have positive or negative concequences for the Australian consumer? Tell us what you think in the comments below.