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How a Strong Pound Affects New Car Prices in the UK

Believe it or not, but the United Kingdom and Germany are the only two major European powers that have seen a rise in new car sales this year. Because of the economic downturn, the majority of Europe has seen something of a slump in sales figures, which has created a lot of cause for alarm.

According to the European Automobile Manufacturers’ Association, new car sales in the United Kingdom have risen by 1.4 per cent in 2012. The figures for the rest of Europe, though, can be described as shocking at best. France has seen a decline of 17.5 per cent, Italy has seen a reduction of 20.2 per cent with Greece’s figures down by a shocking 39.1 per cent.

How has this happened?

The short story is because of the state of the Euro. The Pound is currently flexing its muscles against the European currency, with manufacturers and dealerships able to offer lower new car prices than ever before. The figures from the European Automobile Manufacturers’ Association are very recent (published 15 May 2012), and indicates that the car market in the United Kingdom is well on its way to sustainable recovery.

As the Eurozone car market continues to shrink at a high rate, the UK market continues to expand. This, according to Robert Forrester, chief executive of Vertu Motors, is “good for UK consumers”. With the growth seen in the United Kingdom, it’s believed that car makers are going to target the market to provide sales boosts, and will be able to offer greater freedom than ever before when they price their vehicles.

Aren’t car prices going up?

That’s part of the reason why this is such welcome news! Over the last three years, new car prices have risen from £10,000 to £12,000 on average. Despite this there has still been growth, with more consumers buying cars than businesses according to figures, which shows a healthy public demand. These prices are expected o slow considerably now, with UK consumers likely to be blessed with better deals than ever before!

It’s positive news for all concerned in the UK. Consumers will be able to get their hands on an affordable car deal, whilst manufacturers will have a lot of creative freedom to offer the right type of discounts to their customers. The question is, though, whether this is sustainable for the long-term, and whether the UK can capitalise on the growth the market has seen.

There has been more good news for the UK recently, with news that the Vauxhall plant in northwest Ellesmere Port is getting new investment from parent company General Motors to build a next-gen Astra, securing existing jobs and creating more. Nissan has also announced investment to the tune of £125million in its Sunderland-based plant to build its new Invitation model, whilst Jaguar Land Rover has created over a thousand new jobs in Halewood, near Liverpool, to increase production of its Freelander and Range Rover Evoque models.


Information provided by, the UK’s leading free car comparison search system that can provide incredible discounts on new cars for sale. They can provide amazing prices for new cars across the nation, as well as phenomenal deals on a range of models, vans and contract hire solutions.

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