With an estimated £6billion in cuts forecast by the new coalition government, it is inevitable that the car trade will feel some aftershocks from these measures. Although the cuts are mainly directed at public services the knock on for normal everyday people often results in a lack of confidence and this lack of confidence often manifests itself when it comes to putting money into big ticket items such as cars.
I am no economist (I’m a motor trader) but the fact that the financial markets appear to be in freefall and the banks appear to be tightening up on lending once again (the rate of mortgage lending dropped significantly in April) it can’t help but have a dramatic effect on the retail sector.
As a consequence car dealers will need to be as creative as possible to encourage buyers to part with their cash.
I still believe that everybody needs to play a part. Everyone is now pretty much in agreement that the much heralded worldwide scrappage scheme was a success for all the players, we got our industry back on an even keel whilst learning some harsh lessons about how we created a false market in the past with self-registrations and buy back deals.
The car makers realised that building cars with abandon and hungrily chasing market share without responding to the real needs of the market was a folly. The government realised that the car industry is a huge deal which affects virtually every single one of us at some time or another and that car ownership is part of the fabric of the country and always will be so, the genie having escaped that particular bottle a long time ago.
What I want to hear besides cuts is how we are to rebuild and inject vital confidence in order to get industry in general but especially our industry back to where it should be.
I do have a simple solution, if any influential politicians are reading this, which has seemingly been staring us in the face. Why not get highly profitable companies such as Vodafone, Tesco’s, Shell and BP (ok let’s leave them out of it for now) and unfeasibly wealthy individuals like Roman Abramovich and Lakshmi Mittal (amongst many others) to contribute a bit more of what they make.
Apparently “we’re all in this together” and you never know we might then be able to get back to normal knowing that such great acts of philanthropy will immortalise the givers forever.