UK to Face Heat of Brexit! PSA New Car Price Hikes

Peugeot Citroen increases the prices of its cars for the UK after Brexit vote

Peugeot Citroen Group has dropped the first bomb of the economic war over the UK and it is in the form of price hike. Yes! PSA has pushed the bar up for the prices of its cars offered in the UK, they said that it is because of the pound plunged when the UK decided to leave the European Union.

Isn’t it Interesting?

Usually when companies decide for a price hike they decide on the bases of different factors and customer affordability too. In this case, PSA did not done anything like that and increased the prices of its cars straight away.

But as PSA has claimed that the plunge in the value of pound sterling was the cause of a price increase. In this case, usually organisations observe the currency fluctuations for at least 2 or three months and if currency plunged more than 10 percent for two to three months and then they make adjustments in next one to three months so total of 4 or six months to increase the prices. But PSA did not done anything like that and increased the prices at the beginning of July rather than August. An economic analyst says.

For example in 2000s, in the case of turkey, when their Lira was fluctuating far more than 10 percent, the car prices were remained same and were not adjusted on the bases of currency devaluation at that speed. So, Why a price hike in the UK.

Is that price hike legal?

If we talk about the price hike that why it is not good or looks like a bad decision, we have to consider other companies as well, if other companies like VW group or Mercedes-Benzes’ has done the same than PSA is also an ideal candidate for the price hiking. Otherwise the PSA would be an ideal to refer its case to the courts for price hiking and the courts will definitely impose some serious fines. Otherwise it is a better time to pass this case to the MEPs and MPs to carry out a detailed and in-depth investigation over the issue.

However, if it has led by a Junker politician, he has actually made a serious mistake and it is believed that an investigation team will be working to find out the actual story. Other automakers such as Nissan and Fiat has warned the government that they can face a price hike to overcome the pound’s fall over the last couple of months. But PSA has not warned and straight away done that what they were looking for.

On August 1, they have introduced new prices for the Citroen, Peugeot, and DS brand and a spokesperson from Peugeot said that the increase partially reflects the devaluation of pound by more than 10 percent in the past months against euro followed by Brexit on 23 June. Peugeot 308 compact car has given an average increase and rose by just under 500 pounds with an increase of 2.8 percent. On other hand, Citroen and DS has received an increase of just over 2 percent according to the spokesperson of the company.