It’s interesting to note that, as we cautiously tiptoe our way through this recession, the set of circumstances occurring here in the UK seem to be playing out almost identically in the US. Sales of new cars are at a record low, unemployment is rising, consumer confidence faltering and over-production at epidemic proportions. The start of 2009 could have easily been seen as ‘car meltdown’ but like the UK buyers in the US have been attracted to the fact that the knock-on effect means nearly new and used cars have become great looking value and have been buying them in droves. This situation has almost single-handedly kept a light shining on a very gloomy situation and again, like here many analysts are predicting that shortly new cars will be a viable choice for buyers as used car stock continues to diminish.
What’s also interesting is that SUVs, which before Christmas they couldn’t give away – like the Chevy Suburban -, have enjoyed a comeback. A similar car at the back of last year was $25,000, down by nearly $13,000 but had recently returned to around $30,000! Sound familiar? As does the issue of falling sales of the car rental companies which, again mirroring the UK, has had a dramatic affect on the volumes of used cars moving forward. Finally from the funding aspect, some US industry commentators have noted that ‘there is a very interesting inflection point where the financing of a new car becomes more attractive than that of a used one’ something that MTI has been debating over the last few weeks. So although the way cars are built, their popularity and the way they are distributed, marketed and sold may be very different in the US there are some striking parallels in the way in which both markets are behaving. Both the US and UK motor industries appear to be facing the problems head-on and in a responsible manner.
This sadly may not be said for the governments of each country; in the UK our leaders continue to dither on taking any positive action whatsovever and in the US, while they have pumped in billions of dollars to prop up the “big three” there has still only been talk about a scrappage scheme and it looks as if it may flounder in a sea of politics and accusations of protectionism.
It seems the similarities do not end with the marketplace.