The Unite union spokesman Tony Woodley announcing that an un-named car maker will potentially go under in the next 2-3 days unless they receive immediate financial aid from the government aid package – potentially costing thousands more workers their jobs – is stating what most people involved in the car industry has long suspected. There has been much speculation about who it may be, but whether it is Vauxhall, Nissan, Honda or any other struggling manufacturer it all equals disaster for the industry and its many supply partners. The unions and the SMMT are currently appealing to the government to act swiftly and directly to stave off catastrophe. Commentators are trumpetting the car scrappage schemes being introduced in the EU as a way of breathing life into new car sales and the business as a whole, but although this may help in the short term the problems they are facing run far deeper than encouraging buyers to scrap their existing car for a voucher towards a new car as their priorities will probably be elsewhere at present.
Surely the way forward is to ensure that lenders and finance houses encourage consumers with competitive deals which are available to far more buyers than they are at present after all who started this grotty mess in the first place? It’s ok being a responsible lender and tightening their lending boundaries but in so doing there are potentially thousands of buyers who would have been eminently entitled to finance pre-recession, but as usual in this world we lurch from one extreme to another, and it’s not like customers would need un-secured loans.
The other point to consider is that a lot of the overheating of new car supply is self inflicted, with the car makers almost fanatical race for market share, this scenario could easily be seen as a correction and disastrous pre-registration and guaranteed buy back schemes have cost the industry millions of £s and catastrophic job losses.
New car SALES in future should mean exactly that and not chasing registrations and skewing the figures. The brands that will surely survive this will be the ones which combine sensible planning and supply with competitive pricing, a good model lineup, eco-friendly cars and a strong partnership with their dealer network.
If we actually take a look at the 59% downturn in new car sales from Jan 08 to 09 how many of the cars registered as new car sales last year were actually models sold to customers or businesses and how many were pre-registered? The one small chink of light for our beleaguered car makers at present is that the public transport alternative is showing absolutely no signs of providing travelers with a viable alternative. Prices are the highest in Europe, trains are overcrowded and late and often cancelled so at least car drivers and future buyers will still feel the lure of the open road (however congested) and the desire for the independence of car ownership!