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The Global Car Industry
Robert Court
Posted: 23 December 2011 08:10:05(UTC)
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I believe the global car industry is indicative of the the problems most western economies face at the moment; one of the perceived need for more and more growth and the ability to produce more and more when the demand seems incapable of growing unless fuelled by debt.

1. The global capacity, I believe, for making cars far exceeds the demand.

2. Car production is often considered a star exporter (whether you're a German car maker or South Korean, Italian carmaker etc).

3. Car production, even with advanced automation, still employs lots of people.

4. Older cars are being forced off the road due to higher road taxes.

5. A car is normally the second largest personal expenditure to most people (after property) although many people now spend more on a luxury holiday than the cost of a second hand car.

6. Most people take out finance of some sort to buy a new car (even if you have enough money saved to buy a new one it often makes sense to finance a car than use up your hard-earned capital).

A POSSIBLE SOLUTION?

Why buy something so expensive that in over 99% of cases is only going to depreciate in value?

Maybe the customer should never own the car and just lease it directly from the manufacturer? (This already seems to be happening).

However, I'd suggest that at the end of a fixed period (maybe as short as six months or a year the car goes BACK to the manufacturer to be 'refurbished'). This way a car lasts much longer as it is constantly being 'recycled' with new bits of facia, 'new' engines, sometimes a new bodyshell etc.

The manufacturing plant becomes a recycling plant and there is far less waste yet room for constant gradual improvements.

Instead of getting into DEBT to get a car the car user merely has a continuous 'pay as you go' contract and the 'manufacturer' has a continuous income stream and can also better monitor the many thousands of parts that make the car more or less efficient and viable.

Just a thought - there are so many things like cars that we 'own' that depreciate in value and even though we 'own' them they cost us indirectly in things like insurance and (in the case of cars) huge running costs of road tax, fuel, repairs and maintenance.

The only way we can own a car and not pay out for it is if it is 'off the road' and even then there is the lost economic value of the space it is taking up that could be used more productively.
Graham Barlow
Posted: 23 December 2011 15:23:50(UTC)
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Robert whilst all your observations are correct, you have missed the vital ingredients of the Car. The car manufacturers through their marketing agents realised years ago that the Car is:-
1 The ultimate Status symbol in human aspiration.
2 The car represents mobility and independant freedom.3 The car represents excitement.4 Not least it is also a sexuual statement.

No matter what the economics of the car are in reality the foregoing over rides these facts. Just look at the design of many of them in earlier days The Ford Mustang . A pure Sex symbol projecting Testosterone. Really impractocal Dangerously over powered gas guzzler and difficult to get your Granny in the Back.. The massive opulent limosines provided for potentates and Presidents . The silly Renault Clio which is sold as transport for trysts with Italian Lovers. The fact is all this human physcology sells Cars Now every body in China and India wants one for exactly the same reasons. You try and stop it The Politicans call it progress. The world Economy is now run on Car production and its satelite industries, Oil Steel Rubber, and also TAXATION.
Robert Court
Posted: 23 December 2011 18:17:01(UTC)
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Graham

Thanks for your contribution.

Luckily I feel my front end can speak for itself and have no need for a hunk of metal to do the job for me.

I'm trying to think when I last bought a new car; I believe it was a Golf GLS in about 1984 (£5,000 tax free bought in Germany whilst serving in the Army); wanted a Golf GTi but the practicality of 'five' doors versus 'three' doors won over plus the car was £1,000 cheaper and only went less than 10 mph slower.

The most I've paid for a car in the UK since then is £600.

However, my most recent car is a 1996 Daewoo 'Racer' bought for 1,950 euro over here almost four years ago with just 30,000 kms on the clock (same would be less than £500 in the UK but import tax and registration is a nightmare until the EU rules are actually followed properly).

I imagine I could have bought a couple of Bentley Mulsanne Turbos and had some change over from what I've lost in market value on investments recently!

Oh well, 'chit happens'.

Merry bloody Christmas! :)
keith grocott
Posted: 05 January 2012 10:26:42(UTC)
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Don't Kid yourself, people want their own independent transport, bikes,scooters and ultimately a car.If people have less spending power, car prices will follow .
Anybody who buys crap cars is either up against it financially or a cretin.
So keep rolling out the sleek sexy looking cars and they will sell.
Pity we as a country are not capable it seems thanks to the Labour Party and the likes of RED KEN for those who can remember that period our labour rates can not compete on the world stage, although Nissan ,Toyota and Honda seem to have got it right, maybe they don't stand for the Union Crap. So perhaps there is a case for Virgin or the likes to start our core production of a UK car.
EA
Posted: 25 January 2012 13:20:04(UTC)
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"Anybody who buys crap cars is either up against it financially or a cretin"

What a ridiculous comment to make. Who is to say a car is 'crap' if it serves an individuals purpose and gets you from A-B?

Most people I know with 'sexy new cars' don’t own them, the bank does! So perhaps they are the ones up 'against it'?? It is far less easier to save £20k and buy a car outright but at least its your car!
Dian
Posted: 17 October 2016 04:36:57(UTC)
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I can still remember the automotive industry crisis of 2008–2010. It happened mainly due to Global financial downturn. One by one they had some sort of recovery during last five years. Can we expect similar growth in the car industry during next five years?

http://www.strategyand.p...16-auto-industry-trends

2016 Auto Industry Trends

Spartacus
Posted: 17 October 2016 05:45:07(UTC)
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OP used the phrase "Global Car Industry", will be interesting to see if UK has a car industry at all post Brexit...
Joe Soap
Posted: 17 October 2016 12:09:11(UTC)
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Spartacus;38489 wrote:
OP used the phrase "Global Car Industry", will be interesting to see if UK has a car industry at all post Brexit...

In the main we have a car assembly industry in the UK rather than a car manufacturing industry. There are exceptions of course, but Nissan, Toyota, Bentley, Rolls Royce, Mini, all assemble imported parts into cars to a greater or lesser extent. The shriveled pound will make the parts much more expensive to import, but the labour to assemble them in UK will obviously be cheaper.
Spartacus
Posted: 17 October 2016 16:18:50(UTC)
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Joe Soap;38503 wrote:
Spartacus;38489 wrote:
OP used the phrase "Global Car Industry", will be interesting to see if UK has a car industry at all post Brexit...

In the main we have a car assembly industry in the UK rather than a car manufacturing industry. There are exceptions of course, but Nissan, Toyota, Bentley, Rolls Royce, Mini, all assemble imported parts into cars to a greater or lesser extent. The shriveled pound will make the parts much more expensive to import, but the labour to assemble them in UK will obviously be cheaper.


Was reading today that some car parts cross the channel 5 times during assembly! Clearly tariffs/customs will be a massive burden to car industry and in the event of a hard Brexit can't see how it'll be feasible to run not just a car industry but many other industries in the UK
colin overton
Posted: 17 October 2016 16:36:46(UTC)
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When I worked I had a company car and it was changed regularly. When I was younger after 3 years or less, my cars had already had quite a hard life and done 60,000, often at high speed for long hours in Western Europe.
I then joined a small company and my mileage dropped and taxes went up. One day the Financial Director came into my office and asked me if I'd ever thought how much my "free company petrol" was costing me per mile in tax? It was very high and I was grateful when my company changed the deal I had.
Thinking of retirement, I decided to buy a new car and keep it for ~10 years as my American friends seemed to do with their cars. I did this and any costs divided by 10 always look better. Cars seem to be so much more reliable and last longer. My old £16,000 diesel had done 150,000 miles (at ~50miles to the gallon) when I gave it to a relative, and it still passed the MOT a year later, before any service!
This reliability is of course a problem to manufacturers, who I suspect are grateful for younger people who require the latest and the greenest new cars.
In a pro-Brexit world I guess it might be better to buy a Japanese, Korean or other Asian car rather than a German car for reliability and longevity. I doubt if French or Italian cars are bought with reliability and longevity as prime factors.
As to whether electric cars are really an option is more difficult to say. I had a look at hybrids/electric cars around a year ago and the low running costs were attractive. However range is still an issue. More worrying to me was that the leading electric car models didn't seem to be that reliable, especially when one took the high cost/lowish spec into account - without the government subsidy you'd have to be very "green" to buy one. I don't think a believable 10 year cost of ownership model as been done for electric or hybrid cars. It all depends on whether the batteries have to be replaced and at what cost.
I would have thought that the drive for greener cars and ones that drive themselves would be good opportunities for world manufacturers. Post-Brexit the EU-UK tariffs might mean these opportunities will be taken in Asia and the USA, rather than in Germany or the UK. Especially as the USA-EU tariff talks seem to be at an end.
Personally I have recently been very impressed with a friends Note diesel. Quiet, ~70miles to the gallon and a nice place to be. And made in Sunderland, so no EU tax.
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