LONDON -- UK car prices will have to rise again to offset the fall in value of the pound following the county's vote to leave the EU, Ford's UK chief warned.
Major automakers have already increased prices at least once starting in autumn last year after the pound lost almost 20 percent of its value compared with the euro after the Brexit vote in June.
"You will see further rounds of pricing increase after manufacturers come out of hedging [a financial device to offset currency fluctuations]," Andy Barratt, managing director of Ford of Britain, told Automotive News Europe at the sidelines of the Geneva auto show.
Barratt said he believed the pound would fall in value again when the British government triggers Article 50 of the Treaty of Lisbon and formally begins the process of leaving the EU. Prime minister Theresa May has said she will do that by the end of this month.
Ford has said it will take a $600 million hit in 2017 because of Brexit. The U.S. company is the UK's biggest automaker by unit sales in the UK with a market share of around 12 percent.
Carmakers are hurting financially in Britain after the pound crashed, despite sales holding up. "It's no secret margins are under pressure because of Brexit," Barratt said.
He warned that a 'hard Brexit' that imposed tariffs between the UK and Europe would cause prices to rise further. "A hard Brexit would not be in the consumers' interest," he said.
Barratt predicts a record March for car sales in the country ahead of a road tax change in April, which will make new cars more expensive. Despite that, Barratt expects annual sales to be slightly down on last year's total of 2.69 million as automakers focus their attention on more profitable markets.
"A weaker pound makes it less attractive to bring surplus production to the UK, so that manufacturer push element comes out of the market," he said.
EDITOR'S NOTE: An earlier version of this article contained misspellings and misidentified a road tax increase as a sales tax increase.