RE: UK Car Sales Fall by a Fifth
Thursday 5th March 2009
Nissan recently had to cut Micra productionNew car sales in the UK fell by over a fifth year-on-year in February, industry figures have revealed. Following the announcement there have been calls for more incentives for car buyers to kick-start sales.
UK Car Sales Fall by a Fifth
Industry calls for radical schemes to halt the slump in sales
Nissan recently had to cut Micra production
The Society of Motor Traders and Manufacturers said that the sales of new cars were 21.9% lower last month than a year ago, at 54,359. ‘
'New car registrations continue to decline and although the government recognises the strategic importance of the UK motor industry, urgent action is still needed,’ said Paul Everitt, SMMT chief executive.
‘It is imperative that UK government increases the pace in responding to industry proposals for a scrappage scheme and access to finance and credit.’
Carmakers including Jaguar Land Rover, Honda and Ford have all cut production and workforce in response to the sharp drop in sales. Scrappage schemes would encourage people to trade in older cars for more efficient new models and have seen some success in Germany and Spain.
Germany’s carmaking association said that the incentive increased nationwide sales in February by 22%. Everitt said that around 850,000 workers in the UK are dependent on the car industry and a collapse would affect the whole economy.
February is typically one of the lowest volume months for new car registrations, being just prior to the registration plate change in March. February typically accounts for just 3.4% of annual sales, compared with 18% in March.
Discussion
Maybe the car manufacturers need to get used to a new status quo..
Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
Sivraj said:
What are these "scrappage scheme's" ?
After a given number of years, I think its around 9 the government pay you an incentive to scrap your car if you buy new, a couple of grand has been rumoured.I dare say others will be along shortly with a more definative answer
Edited by Stuart J on Thursday 5th March 12:45
BJWoods said:
Maybe the car manufacturers need to get used to a new status quo..
Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
That about sums it up !Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
Stuart J said:
BJWoods said:
Maybe the car manufacturers need to get used to a new status quo..
Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
That about sums it up !Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
jimjim150 said:
Stuart J said:
BJWoods said:
Maybe the car manufacturers need to get used to a new status quo..
Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
That about sums it up !Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
I agree that buying a car on credit along with a new house purchase on a 100% mortgage was only going to end in tears. Those who've over-stretched themselves for the sake of keeping up with their neighbours have only themselves to blame.
Surely if year-on-year sales are down 22% then this is a slight up-turn over the 30-40% year-on-year drops from October to January.
Maybe things are picking up a little? Although it is still a terrible situation for all in the industry.
I will be very interested in how the March/April figures stack-up.
Maybe things are picking up a little? Although it is still a terrible situation for all in the industry.
I will be very interested in how the March/April figures stack-up.
BJWoods said:
Maybe the car manufacturers need to get used to a new status quo..
Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
I think you have hit the nail on the head. I would extend this to other areas aswell. It is not so much a recession as a correction!Car sales were propped up for years by very easy credit,etc,etc,etc
Industry recognised massive overcapacity in production..
Name any 4-5 car manufacturers, if they vanished overnight, would there still be overproduction of vehicles..
Not saying I like it, sad jobs will be lost..
But business reality, this was a correction long overdue.
B
MTR
It should be illegal to buy a car on credit
either you have the cash or you buy something suitable to your means, simple as that
it is criminal in my personal opinion to push sales just giving credit for such big ticket items
good for business... however in this way business models that could not survive in a "cash only" market are allowed to grow and thrive using leverage. We saw the result with banks and now unfortunately it is for other sectors with flawed business models like GM and F
debt is only good if it is going to fund investment, never consumption
mortgages should be allowed only for the house where you live in and NOT to fund 11-th hour "property developers" riding the bandwagon. If your genuine business is real estate then fine but normal people should not be allowed to build those pyramid schemes where flats were purchased by borrowing against another existing property
it is well possible that we will have to adapt to a low leverage economy that will pay attention to a good business models before throwing money at it - first has to be our government
Controversial but it is just common sense
The "feel good" factor was an illusion: while inflation was low on normal goods we forgot to see inflation exploding in our real assets, in our homes. We felt rich but we were not.
first we have to pay most of the excessive debt (not all) then we have to learn to save again
then we have to learn to properly invest
What our politicians are doing in UK and US is madness and it is only good for political kudos in the short-term but it is not going to be good for us in the long-term
shame
either you have the cash or you buy something suitable to your means, simple as that
it is criminal in my personal opinion to push sales just giving credit for such big ticket items
good for business... however in this way business models that could not survive in a "cash only" market are allowed to grow and thrive using leverage. We saw the result with banks and now unfortunately it is for other sectors with flawed business models like GM and F
debt is only good if it is going to fund investment, never consumption
mortgages should be allowed only for the house where you live in and NOT to fund 11-th hour "property developers" riding the bandwagon. If your genuine business is real estate then fine but normal people should not be allowed to build those pyramid schemes where flats were purchased by borrowing against another existing property
it is well possible that we will have to adapt to a low leverage economy that will pay attention to a good business models before throwing money at it - first has to be our government
Controversial but it is just common sense
The "feel good" factor was an illusion: while inflation was low on normal goods we forgot to see inflation exploding in our real assets, in our homes. We felt rich but we were not.
first we have to pay most of the excessive debt (not all) then we have to learn to save again
then we have to learn to properly invest
What our politicians are doing in UK and US is madness and it is only good for political kudos in the short-term but it is not going to be good for us in the long-term
shame
Edited by Double R on Thursday 5th March 13:29
Double R said:
It should be illegal to buy a car on credit
either you have the cash or you buy something suitable to your means, simple as that
it is criminal in my personal opinion to push sales just giving credit for such big ticket items
good for business... however in this way business models that could not survive in a "cash only" market are allowed to grow and thrive using leverage. We saw the result with banks and now unfortunately it is for other sectors with flawed business models like GM and F
debt is only good if it is going to fund investment, never consumption
mortgages should be allowed only for the house where you live in and NOT to fund 11-th hour "property developers" riding the bandwagon. If your genuine business is real estate then fine but normal people should not be allowed to build those pyramid schemes where flats were purchased by borrowing against another existing property
it is well possible that we will have to adapt to a low leverage economy that will pay attention to a good business models before throwing money at it - first has to be our government
Controversial but it is just common sense
The "feel good" factor was an illusion: while inflation was low on normal goods we forgot to see inflation exploding in our real assets, in our homes. We felt rich but we were not.
first we have to pay most of the excessive debt (not all) then we have to learn to save again
then we have to learn to properly invest
What our politicians are doing in UK and US is madness and it is only good for political kudos in the short-term but it is not going to be good for us in the long-term
shame
either you have the cash or you buy something suitable to your means, simple as that
it is criminal in my personal opinion to push sales just giving credit for such big ticket items
good for business... however in this way business models that could not survive in a "cash only" market are allowed to grow and thrive using leverage. We saw the result with banks and now unfortunately it is for other sectors with flawed business models like GM and F
debt is only good if it is going to fund investment, never consumption
mortgages should be allowed only for the house where you live in and NOT to fund 11-th hour "property developers" riding the bandwagon. If your genuine business is real estate then fine but normal people should not be allowed to build those pyramid schemes where flats were purchased by borrowing against another existing property
it is well possible that we will have to adapt to a low leverage economy that will pay attention to a good business models before throwing money at it - first has to be our government
Controversial but it is just common sense
The "feel good" factor was an illusion: while inflation was low on normal goods we forgot to see inflation exploding in our real assets, in our homes. We felt rich but we were not.
first we have to pay most of the excessive debt (not all) then we have to learn to save again
then we have to learn to properly invest
What our politicians are doing in UK and US is madness and it is only good for political kudos in the short-term but it is not going to be good for us in the long-term
shame
Edited by Double R on Thursday 5th March 13:29
Quite frankly I would not car if GM went they produce some shocking cars in the US. I had a hired top of the range SUV on a ski trip, it was like driving a 25 year old Range Rover. At 80 it wallowed and weaved – horrendous, nasty and way off the pace.
It's about survival of the fittest.
Good product sell themselves and deserve our money.
It's about survival of the fittest.
Good product sell themselves and deserve our money.
Scrap VAT on new cars so that private buyers don't suffer huge depreciation the instant they've registered a vehicle as a result of there being no distinction between their privately bought vehicle and one bought by a VAT-registered entity.
Make it a legal requirement that discounts given to fleet buyers are also given to individual buyers so that individuals don't lose a huge amount of cash the instant they register their car because there's no distinction between it and one that is part of a fleet.
Scrap showroom tax and punitive rates of VED on larger-engined new cars.
Tell manufacturers to price their vehicles more fairly in 'rip-off Britain'.
Make it a legal requirement that discounts given to fleet buyers are also given to individual buyers so that individuals don't lose a huge amount of cash the instant they register their car because there's no distinction between it and one that is part of a fleet.
Scrap showroom tax and punitive rates of VED on larger-engined new cars.
Tell manufacturers to price their vehicles more fairly in 'rip-off Britain'.
Sivraj said:
What are these "scrappage scheme's" ?
The german scrappage scheme is officially named "Umweltprämie" ("Umwelt" meaning "environment"), since it is intended to boost the sale of new or up to one year old cars, and these new cars are supposed to benefit the environment.The scheme offers 2,500 € to any individual scrapping his car, that is
- at least nine years old
- at least one year in his possesion
and, most importantly, buys a new or nearly new car.
One important point is, that the scheme is limited to 1,500 million €, which should suffice for 600,000 cars.
This scheme has bizarre consequenzes:
- The scrapyards don't actually scrap the cars, but sell them on to foreign countries. The rules have been changed these days to prevent that.
- An astonishing number of people turn in cars, that are actually worth more than 2,500 €. Knowing that the scheme is limited to 600,000 cars makes some people loose their common sense.
- As one might expect the sales of small cars are up. So is scheme is quite helpful for, let's say, the Korean car industry...
My opinion: It is a waste of taxpayers money.
The biggest issue with running a car is not specifically the purchase price but actually the depreciation. In a scenario where over-supply of new cars exists, this will inherently result in oversupply of used cars thereby worsening their residual values. The mass discounting of fleet vehicles further compresses used values by flooding the market with cars that the companies can afford to sell for less money due to paying less in the first place.
If people buy less new cars and hang onto their 'used' cars for longer, this will go some way to propping up residual values by bringing demand for used cars more in line with supply. If this situation persists, it will eventually have a positive effect on new sales as people find themselves in a situation where they lose less money in depreciation on a new car due to more robust used values and can therefore better afford the amount that the car will cost them to run, whether they finance this with credit or out of their own pocket.
This is, of course, very much NOT a quick fix!
If people buy less new cars and hang onto their 'used' cars for longer, this will go some way to propping up residual values by bringing demand for used cars more in line with supply. If this situation persists, it will eventually have a positive effect on new sales as people find themselves in a situation where they lose less money in depreciation on a new car due to more robust used values and can therefore better afford the amount that the car will cost them to run, whether they finance this with credit or out of their own pocket.
This is, of course, very much NOT a quick fix!
I have a 09 plater arriving on May. I'm not buying it, I'm doing a personal lease deal. I need a small nippy car for town driving so I have a Smart CDi with 85MPG. OK so it will probably be more like 60-70MPG but do the sums and it works out cheaper than existing car, buses or even the train to get to work.
I know many will flame me for buying a Smart, but I'm doing this as a means to get me to work and back. It sickens me to see all these huge cars with 1 person in them going to and from work every day. We need a cultural change, not only to credit (fully agree with comments above) but also a shift in the view that we all need 3.0litre performance cars for travelling to work.
I currently average 28MPH going to and from work - why would I need a car that can do 70+MPH - after all, there is no where legal to do more than that on any road in this country (UK).
My other car will now become a 'family car' for the weekend when all four seats get used.
Oh and I will not have to pay a penny for road tax, whos laughing now
Oh one other thing that no one has mentioned... the car industry have been building more cars than they can sell year on year for far too long - how could they ever justify that way of doing business. I agree that jobs will go, shame, but I also don't see why us TAX payers have to prop up bad business models.
I know many will flame me for buying a Smart, but I'm doing this as a means to get me to work and back. It sickens me to see all these huge cars with 1 person in them going to and from work every day. We need a cultural change, not only to credit (fully agree with comments above) but also a shift in the view that we all need 3.0litre performance cars for travelling to work.
I currently average 28MPH going to and from work - why would I need a car that can do 70+MPH - after all, there is no where legal to do more than that on any road in this country (UK).
My other car will now become a 'family car' for the weekend when all four seats get used.
Oh and I will not have to pay a penny for road tax, whos laughing now
Oh one other thing that no one has mentioned... the car industry have been building more cars than they can sell year on year for far too long - how could they ever justify that way of doing business. I agree that jobs will go, shame, but I also don't see why us TAX payers have to prop up bad business models.
Edited by motormania on Thursday 5th March 14:03
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