Sterling/EUR
& Sterling/USD FX rate movements 2016
What
is the impact of FX movements on MGBGTV8 prices?
Sterling/Euro and Sterling/US$
exchange rates have moved significantly following the UK Brexit result providing
potential savings for overseas buyers of MGBGTV8s offered for sale in the UK priced
in Sterling. Taking a Condition 1 MGBGTV8 offered at the price indicated in our
updated price guide as an example:
This
worked example indicates a likely saving of around two thousand pounds (Sterling),
between 8.5% and 9.6% on the "Euro/US$ prices" in May earlier this year,
which will provide an attractive discount for potential buyers in the Eurozone
and overseas. There is probably a 2 to 3 year "buyers' window" in
the Eurozone before the EU is likely to introduce import duties and taxes
on classic cars imported from the UK. | In
a lead article reviewing the effects of Brexit on classic car demand and prices
in the UK, Classic Car Weekly says in its latest issue "demand from international
buyers will rise, values will remain strong and classic friendly legislation will
be more easily achieved".
Demand from international buyers
Following
the Brexit result from the UK referendum exchange rates have moved against
Sterling leaving UK classic cars less expensive for buyers in Euros or US Dollars.
That FX movement also reduces shipping costs too. In the longer term opinions
vary over the Brexit effect on the UK classic car market - in the short term CCW
says "it's unlikely the domestic (UK) market will feel any effect from Brexit
if people keep on spending". The factors having a bearing on spending on
classic cars are likely to be low deposit interest rates in the UK encouraging
"alternative investment activity" in the classic car market and
the general state of the UK economy.
UK classic car market and
prices
With the prospect of still lower deposit interest rates in the UK
the alternative investment activity in classic cars we have seen growing over
the last 18 months or so is likely to continue and probably grow thereby supporting
the domestic market and prices. That effect has been seen this year and will continue
to be a factor in the UK MGV8 market and prices.
Longer term - possibility
of EU import duties and taxes
In the longer term Nick Whale of Silverstone
Auctions is reported by CCW as saying he is "unsure about the longer term
but agrees there will be turmoil in the coming months as leaving the EU will unsettle
values. We don't know what rates of import duties or taxes various EU countries
will levy on classic cars imported from the UK and the consequential willingness
of EU based enthusiasts to buy".
EU classic car legislation
Geoff
Lancaster (FHBC) is reported as saying "a Remain vote would have secured
us a seat at the table when discussing the classic car movement across Europe
but having left we will only be able to watch (the development EU classic car
regulations) from the sidelines". Sir Greg Knight (chairman of the Parliamentary
Historic Vehicle Group at Westminster) disagrees saying "Britain is classic
car friendly and I feel this (Brexit) move will allow us to breathe easier."
Whether the UK Government will put into effect the recent unwelcome EU roadworthiness
directive
that will apply to classic cars remains to be seen as technically the UK is still
in the EU and obliged to do so until we are out! Chris Hunt Cooke feels that with
Brexit there will be "less possibility of unwelcome classic car regulation"
as the UK approach is far less rigid and focused on ensuring vehicles are safe
and allowing sensible improvements or upgrades. |
