The combined efforts of the nation’s Arfur Daleys only managed to shift 128,352 new cars in Oct, 23% down on the previous month’s already grim figures. Hefty discounts and incentives have failed to boost activity, since potential buyers either cannot get credit terms or are hanging onto their precious cash and driving the old jalopy for a another year or two. The prognosis for both car dealers and factories like Nissan’s in Sunderland and Honda’s in Swindon is thus looking pretty dour.
But Toyota’s surprise Q3 profit collapse – and slashing of its forecast for 2008 by more than half, down to 559bn Yen - is perhaps the worst news of all from the industry. When even the biggest and most efficient car maker in the world can’t manoeuvre itself out of trouble, what chance does anyone else have?
BMW – another car industry success story of recent years, whose impeccable blue-and-white brand is amongst the most prestigious in the world – is also in bother, posting an almost as bad 63% Q3 fall in profit. In fact it’s hard to think of a major motor manufacturer that isn’t bracing itself for a very bumpy ride, indeed. Gentlemen, arm your airbags.
But even so things could be worse, as the truly awful state of the US motor giants shows. The big three – GM, Ford and Chrysler – are desperately trying to stem a tide of disaster than threaten to overwhelm them all. Vast pension liabilities, plummeting sales and pitiful productivity just for starters. Having already sold Jaguar and Aston Martin, Ford may now be forced to put Volvo up for auction, too. GM is losing $1bn a month and Chrysler will do well to survive if it cannot find itself a new owner, and sharpish.
Analysts mutter darkly that bankruptcy for any of the trio is now far from unthinkable. This for the companies whose flamboyant products were the physical embodiment of the American Dream for the last half of the 20th Century.
Still, if you are one of the couple of dozen people out there who do actually want to buy a new car, there should be some corking deals out there. Buy one get one free, anyone?
In today's bulletin:
Bank gets radical with 1.5% interest rate cut
UK sales tumble, global car business hits brick wall
Eurostar shines bright at 2008 Green Business Awards
Federation of Small Businesses demands cut as bankruptcy fears mount
MT's Little Ray of Sunshine: Nice for Sir Tom
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