Keeping the Bubble Inflated?

brightonman123

i can see the UK govt being bankrupted by other industries claiming bailouts, and suing when they dont get them- a dangerous precedent with the banks, followed by car firms..

were all dooomed!

thriftybabe

OH usually trades in his cars every 3 years. We are holding on to ours for longer as it has lost so much value. I really like the idea of what the Germans are doing and giving money to customers who are trading in the old cars for new. Surely that would be a better way of helping the market?

Thrugelmir

thriftybabe wrote: »

OH usually trades in his cars every 3 years. We are holding on to ours for longer as it has lost so much value. I really like the idea of what the Germans are doing and giving money to customers who are trading in the old cars for new. Surely that would be a better way of helping the market?

And what happens to the traded in vehicles? This will depress second hand values causing new vehicles to depreciate even quicker.

Maybe if new cars were priced sensibly in the first place then the market would return to normality.

Austin_Allegro

It all sounds like British Leyland again to me...

If HMG has to subsidise people's employment, I'd rather it was in some kind of infrastructure projects that will give lasting value to the nation, like the New Deal in the 30s depression, though there's a theory that that just prolonged the depression anyway.

Rochdale_Pioneers

Austin_Allegro wrote: »

It all sounds like British Leyland again to me...

If HMG has to subsidise people's employment, I'd rather it was in some kind of infrastructure projects that will give lasting value to the nation, like the New Deal in the 30s depression, though there's a theory that that just prolonged the depression anyway.

And if the Honda and Nissan factories were churning out appaling products like the Austin Allegro then that would be a fair point. Here we have profitable efficient companies churning out cars from factories that are amongst the best in the world - THE best in the case of Nissan.

It would be madness to throw these facilities away on the pyre of market forces, allowing production to transfer abroad. Thats not to say all the industry should be propped up - the guy from LDV on the Today show this morning saying they haven't made a profit in 4 years didn't win any sympathy from me. But good companies making products that we will be buying again once things pick up? It would be an act of vandalism to allow that industry to disappear from the UK.

Wookster

Rochdale_Pioneers wrote: »

And if the Honda and Nissan factories were churning out appaling products like the Austin Allegro then that would be a fair point. Here we have profitable efficient companies churning out cars from factories that are amongst the best in the world - THE best in the case of Nissan.

It would be madness to throw these facilities away on the pyre of market forces, allowing production to transfer abroad. Thats not to say all the industry should be propped up - the guy from LDV on the Today show this morning saying they haven't made a profit in 4 years didn't win any sympathy from me. But good companies making products that we will be buying again once things pick up? It would be an act of vandalism to allow that industry to disappear from the UK.

You are still missing the point: as Thrugelmir pointed out above there is estimated to be 20-30% over capacity globally. Somewhere in the world, someone 'bailing out' their car plants is pouring money into a black hole because the demand for that many vehicles just is there and won't be there, even when we see the seeds of recovery.

Would you like your money thrown down a black hole?





...oops darn I know the answer to that already, course you would... so long as its a Labour government throwing it away.

MrFonzerelli

The UK needs to ensure our high tech, high value add industries are competitive with those abroad. If other countries are subsidising the high tech industries in their countries with bailouts, I would argue that we should consider doing the same (with strings attached).

We can't all work in KFCs or McDonalds...

Thrugelmir

Rochdale_Pioneers wrote: »

And if the Honda and Nissan factories were churning out appaling products like the Austin Allegro then that would be a fair point. Here we have profitable efficient companies churning out cars from factories that are amongst the best in the world - THE best in the case of Nissan.

It would be madness to throw these facilities away on the pyre of market forces, allowing production to transfer abroad. Thats not to say all the industry should be propped up - the guy from LDV on the Today show this morning saying they haven't made a profit in 4 years didn't win any sympathy from me. But good companies making products that we will be buying again once things pick up? It would be an act of vandalism to allow that industry to disappear from the UK.

Come and see the car park near me with some 7,000 Honda's parked up. And that's with no production for 5 months.

And should the Government bail out the local seat makers who are dependent on Honda as well. It's not as straightforward as it seems. Who do you save and who drowns ?

treliac

I think the drop in demand will continue. Too many of us have expected too much for too long. It's all been unrealistic and unsustainable.

My bet is that a good deal of new cars bought in recent years have been from the proceeds of mewing; all contributing to the mess we're in and all part of a much needed readjustment in attitudes towards materialism.

dopester

Rochdale_Pioneers wrote: »

Its a pretty simple debate. The catastrophic drop in demand for cars won't last long term. When the good people of Europe and America and elsewhere start buying cars again they will likely have a smaller choice of vehicles to choose from. We know there is some flab in the system which can be removed, but its a question of where.

New car prices are too high, in my opinion, for prevailing economic conditions. Yes there is "demand", but people who can't afford new car prices, can't get credit, or won't spend or take on debt to buy over-valued items.

It won't last because there will be new challengers, and new innovation, who will adapt to what the market needs.

Challengers might be fewer on that ground than in other sectors due to high capital costs, but not impossible - or it may come from an existing manufacturer who drops prices and goes for market share. Or businesses who overhaul older cars to near perfect new working condition for a lot less money than buying new. The market will find a way - but helped if governments don't tip the advantage in supporting failing businesses and business models.