Sun, Feb 17, 2019 - Page 16 News List

Porsche warns of possible 10% Brexit price increase

Bloomberg

Porsche AG’s UK unit has told customers they might have to pay as much as 10 percent more than expected for their imported cars if the UK makes a hard Brexit and their imported car arrives after March 29, when the country is set to leave the EU with or without a deal.

The move is a “precautionary step” that allows customers “to plan ahead, should this situation arise,” Porsche said on Friday in an e-mailed statement.

Customers who placed deposits on or before January 17 would not be affected.

The move by Volkswagen AG’s most profitable division marks the latest sign that failing to reach a divorce deal between the UK and the EU could send ripple effects across the industry, which would affect dealerships, factories and suppliers.

Ford Motor Co warned this week of dire consequences for its UK factories that employ more than 7,000 people if politicians fail to avert a no-deal split.

Affected Porsche customers would have the option to “adjust their order accordingly,” Porsche said in the statement.

“Like the rest of the industrial sector, we need comprehensive clarity on the shape of future relations between the UK and the EU very quickly,” it said.

Unlike automakers such as Ford, Nissan Motor Co and Jaguar Land Rover, the German sports car maker has no manufacturing operations in the UK. The company imports all of its vehicles from EU states.

Porsche delivered a record 256,255 cars worldwide last year, up 4 percent from 2017, fueled by growth in its largest markets, China and the US.

It is a real problem for Porsche, because the UK has traditionally been one of its largest markets in Europe.

Well-heeled shoppers in London have snapped up its 911 sports cars and the Macan and Cayenne sports utility vehicle (SUV)s, which occasionally have been mocked as “Chelsea tractors.”

Porsche’s popular Macan compact SUV, which starts at £46,344 (US$59,766) including value-added tax, would cost £50,978 if the duty was to be implemented.

The surcharge would help Porsche protect earnings if no deal is reached and the UK falls back to WTO rules, ending an era of tariff-free transportation of goods within the EU, the world’s largest trade bloc.

“For us, the current state means a further period of insecurity and planning uncertainty,” Porsche said. “In light of the current difficult situation we continue to prepare for all eventualities.”

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