Brexit?
Brexit refers to Britain Exiting the European Union. Last week there was a referendum on whether Britain should remain in or leave the European Union. The majority vote was to leave the EU.
This isn’t going to turn into a politics essay or rant, but it is going to cover the impact of the result on importing cars from Japan…..
….and it isn’t good news.
The cost of importing a car from Japan depends on two exchange rates, as described here. Once the EU referendum result was announced, there was a swift weakening of the pound against the US dollar and Japanese yen.
Brexit vote = substantial weakening of £ against ¥ & $
On Thursday 23rd June 2016, the day of the referendum, £1 could buy 158 Japanese yen.
On Friday 24th June, when the result was announced, that £1 could only buy 136 Japanese yen. There have been fluctuations since, but things haven’t recovered yet.
The £:US$ rate went from 1.48 to 1.33. This increased the cost of shipping cars from Japan: shipping is billed in $.
The impact of the weaker pound on importing a car from Japan
Here are some examples of the impact on this change in exchange rates on the costs of importing a car from Japan.
A car that was going to cost £5,000 now costs £5,506.
A car that was going to cost £10,000 now costs £11,318.
A car that was going to cost £20,000 now costs £22,934.
So you can see there has been some increase in costs, the magnitude of which depends on the purchase price of the car. I think Japanese import cars still represent good value for money, especially in the case of cars that can’t be bought anywhere else and offer something different to anything available on the UK domestic market. However there is no denying they aren’t quite as good value as they were a month ago!
Will the rates improve again? I suspect (and hope) so. As for when this will be, I really don’t know, but it can’t come soon enough for all us Japanese car enthusiasts!
(Please note all of the numbers and rates quoted here are approximate).
