Over at the Detroit Motor Show, the chastened big car companies have been unveiling their latest models – and in the case of Jaguar and BMW, some impressive figures. Jaguar, whose owner is currently in talks with the Government about some kind of financial aid package, said its global sales were up 8% last year – a handy reminder to the Treasury that this is a brand worth saving. Another brand on the up is BMW’s Mini, with sales soaring 29% in the US last year. It’s a gloomy time for the UK car industry – but these two British-built marques provide some cause for optimism…
Jaguar, which has been in the news for all the wrong reasons lately, was over in Detroit to unveil its new XFR model. You’d be forgiven for wondering what chance it has of flogging a load of £60,000 cars this year (even if it can rack up 225mph). But clearly car buyers haven’t fallen out of love with Jaguar: it sold 8% more cars last year, despite the tough conditions. Unfortunately, Land Rover is running a lot less smoothly – its sales fell last year, as buyers opted for smaller vehicles. So further job losses are likely at the combined group.
One leading beneficiary of this downsizing has been Mini, the iconic British brand now owned by German behemoth BMW (but built in the UK - production has just re-started after an extended Christmas break). Globally, its sales inched up a more modest 4% - but the most eyebrow-raising figure was its success in North America, where sales rose by more than a quarter (making it Mini’s biggest market). Bigger has always seemed to be better when it came to US cars, but it looks like buyers are finally thinking smaller. Good news for BMW; bad news for the US car-makers.
OK, so these two marques aren’t actually British-owned any more. But there’s still hope for the UK car industry, not least because a Government obsessed with boosting employment (hence its summit today) will find it hard to stand by and watch thousands of auto workers get laid off. Although it seems nervous about committing to a bailout, perhaps because it’s worried about setting a dangerous precedent (the UK porn industry could be next, if the US is anything to go by), it’s clearly mulling some alternative schemes.
Top of the list at the moment seems to be a support package for motor-finance companies, which makes sense; nobody’s going to be buying cars if they can’t get their hands on an affordable loan. Now Business Secretary Peter Mandelson has admitted that the Treasury may provide additional funding or loan guarantees to help oil the wheels (so to speak). But it remains to be seen whether this will be enough to save an industry facing its biggest crisis for decades...
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