Storage Of Motor Cars Led To The Downward Gdp

[crash 2005]

This paragraph appears on the BBC website:

The UK economy was growing at an annual rate of just 1.5% in the second quarter of 2005, according to new figures.

The unexpected revision meant that UK growth was at its weakest since 1993.

In the three months to June, UK GDP grew by 0.5% compared to the previous quarter, the Office for National Statistics (ONS) said.

Changes to public administration, defence, and transport and storage of motor cars led to the downward revision of the annual figure.

Does this mean that their are a serious number of unsold cars flooding the market??

If so, isn't this what happened just prior to the last houseprice crash / reccession!!

If this is the case it is very stong indicator of potential house price falls as the two are strongly linked, being major purchases.

Does anyone know or have data on the state of the car market.?? I know last time they used disused airfields to store cars in there thousands.

[Smell the Fear]

This paragraph appears on the BBC website:

The UK economy was growing at an annual rate of just 1.5% in the second quarter of 2005, according to new figures.

The unexpected revision meant that UK growth was at its weakest since 1993.

In the three months to June, UK GDP grew by 0.5% compared to the previous quarter, the Office for National Statistics (ONS) said.

Changes to public administration, defence, and transport and storage of motor cars led to the downward revision of the annual figure.

Does this mean that their are a serious number of unsold cars flooding the market??

If so, isn't this what happened just prior to the last houseprice crash / reccession!!

If this is the case it is very stong indicator of potential house price falls as the two are strongly linked, being major purchases.

Does anyone know or have data on the state of the car market.?? I know last time they used disused airfields to store cars in there thousands.

Can anyone clarify: does GDP take account of inflation or is it nominal? If it is nominal, a 0.5% per quarter GDP increase indicates a contracting economy surely (if inflation is running at greater than this rate).

[homeless]

At the last recession this is exactly what happened, there were huge lots of unsold cars, 100s of 1000s of them,The bbc used to show the pics of them on the news.

To get rid of them there was a serious big auction, and fleet companies ect were buying the new cars at half retail price.

[dipstick]

Third time I've mentioned it this week.

Relation is a car salesman, says things have been down for 8 months. Nobody wants to tie themselves in to more debt.

He looked a worried man

[crash 2005]

Third time I've mentioned it this week.

Relation is a car salesman, says things have been down for 8 months. Nobody wants to tie themselves in to more debt.

He looked a worried man

Maybe its time to rename this website to Housepricecrash&reccession.co.uk

[deano]

My local auction house is advertising to the public to sell thier cars thier (never done this before). I guess with little shifting on the forecourt there are fewer PX's to go to auction and it shows; less cars going through. You would think this would put upward pressure on prices but thats not what I am seeing on the floor. There are bargains to be had I can asure you.

Edited September 28, 2005 by deano

[Guest KingCharles1st]

I nearly posted in similar vein a few days ago. Round the back of the local Mazda dealer, there were so many cars i couldnt even begin to count them- 2-300 maybe...?

[The Masked Tulip]

It is second hand dealers you need to check out - I bet loads of upmarket cars will be appearing on their forecourts pretty soon.

[Serpico]

I was in the motor trade in a fairly big way back in the early 80s crash. Vauxhall Motors Ellesmere Port ceased production of the Astra and shut down because of the glut of unsold cars, thousands out of work.

We were doing okay but not good at the time but I was carrying around around half a £million a lot of money in those days in liabilities secured by two showrooms/workshops both with flats above plus a personal guarantee on my £200K house which had an £8K mortgage on it. Same as everyone else in the trade funding was by stocking loans and bank overdraft.

The first serious indication of serious trouble was from the girl who collected our weekly advert for the Chester Chronicle who told me that one of Chester's oldest and biggest dealers had closed, this was just before the new Aug 1st rush. Their bank had pulled the rug on the grounds that they had not SOLD 100 new cars, or however many,% and were not depositing the full funds from the sales but were taking 90% P/exs that they were not prepared to finance.

We hung on for a couple more years because we were in the strong position of owning and not having any debt on or leased business premises. I eventually pulled the rug myself and got out by the skin of my teeth. The house went for £110k in 1984 (net house prices, sold in 2002 £659K and again in 2004 for £795) the smaller business property sold fairly quickly for a reasonable price, but the really nice big place with two large flats above, prime site in a prosperous area lay empty for four years. Valued by Natwest for security at £225K eventually sold for £40K. Shit happens even to the smart ass f*****s at the banks?

The house had a second charge after the £8 with a stocking loan finance company, they played straight with me. I had given them millions of £s of business over the years, the house sale left them with a very small shortfall but they still gave me a cheque for £20k back for playing straight with them.

I was one of the lucky ones I had Natwest stitched tight with their only security against the business premises that they had expertly valued, they had there a**e smacked to some tune, doubt if they lost though, they had been stitching us on a day to day compounding interest of 19% and overcharges for years. After closing the business and getting the brain straight, takes a while after seeing 25 years of hard graft down the drain, I worked out they had shafted us for over £185K in wrong interest and overcharges. Trouble was I had not got the funds to employ a forensic accountant and the briefs to fight them.

Hardest thing was throwing 27 bloody good loyal staff, none of whom had been with me less than 12 years on the scrapheap. One who had been with me over 20 years committed suicide two years later by jumping off a fire escape with a noose around his neck. Never new until years after when a traffic patrol recognised me, pulled me over and told me that the guy had turned to drink because he could not get another job in his 50s and was living in a shithole flat after leaving the nice flat he had over my business.

When the motor trade is struggling that's an apocolypse warning. the banks get nasty on the retail trade as a whole and jobs go down like a row of dominoes. Good customer of mine sat in my office in tears, owned a big if not the biggest department store in Liverpool 650 staff, told me his bank had called in his £6million o/d, 1982, with six weeks to pay. Tsunami 650 more down the dole office.

We ain't seen nothing yet, it took five years from the start of that recession to take me out and I got out clean debt free with a few bob, I know for a fact that over 6,000 in the same trade as me went bust committed suicide or just closed down, if the average employees were 25 each that's 150.000 jobs gone.

And that ***** Blair looks like being in for another full term, OH SHIT!!!!!!!!!!

Edited September 28, 2005 by Serpico

[crock]

I was in the motor trade in a fairly big way back in the early 80s crash. Vauxhall Motors Ellesmere Port ceased production of the Astra and shut down because of the glut of unsold cars, thousands out of work.

We were doing okay but not good at the time but I was carrying around around half a £million a lot of money in those days in liabilities secured by two showrooms/workshops both with flats above plus a personal guarantee on my £200K house which had an £8K mortgage on it. Same as everyone else in the trade funding was by stocking loans and bank overdraft.

The first serious indication of serious trouble was from the girl who collected our weekly advert for the Chester Chronicle who told me that one of Chester's oldest and biggest dealers had closed, this was just before the new Aug 1st rush. Their bank had pulled the rug on the grounds that they had not SOLD 100 new cars, or however many,% and were not depositing the full funds from the sales but were taking 90% P/exs that they were not prepared to finance.

We hung on for a couple more years because we were in the strong position of owning and not having any debt on or leased business premises. I eventually pulled the rug myself and got out by the skin of my teeth. The house went for £110k in 1984 (net house prices, sold in 2002 £659K and again in 2004 for £795) the smaller business property sold fairly quickly for a reasonable price, but the really nice big place with two large flats above, prime site in a prosperous area lay empty for four years. Valued by Natwest for security at £225K eventually sold for £40K. Shit happens even to the smart ass f*****s at the banks?

The house had a second charge after the £8 with a stocking loan finance company, they played straight with me. I had given them millions of £s of business over the years, the house sale left them with a very small shortfall but they still gave me a cheque for £20k back for playing straight with them.

I was one of the lucky ones I had Natwest stitched tight with their only security against the business premises that they had expertly valued, they had there **** smacked to some tune, doubt if they lost though, they had been stitching us on a day to day compounding interest of 19% and overcharges for years. After closing the business and getting the brain straight, takes a while after seeing 25 years of hard graft down the drain, I worked out they had shafted us for over £185K in wronk interest and overcharges. Trouble was I had not got the funds to employ a forensic accountant and the briefs to fight them.

Hardest thing was throwing 27 bloody good loyal staff, none of whom had been with me less than 12 years on the scrapheap. One who had been with me over 20 years committed suicide two years later by jumping off a fire escape with a noose around his neck. Never new until years after when a traffic patrol recognised me, pulled me over and told me that the guy had turned to drink because he could not get another job in his 50s and was living in a shithole flat after leaving the nice flat he had over my business.

When the motor trade is struggling that's an apocolypse warning. the banks get nasty on the retail trade as a whole and jobs go down like a row of dominoes. Good customer of mine sat in my office in tears, owned a big if not the biggest department store in Liverpool 650 staff, told me his bank had called in his £6million o/d, 1982, with six weeks to pay. Tsunami 650 more down the dole office.

We ain't seen nothing yet, it took five years from the start of that recession to take me out and I got out clean debt free with a few bob, I know for a fact that over 6,000 in the same trade as me went bust committed suicide or just closed down, if the average employees were 25 each that's 150.000 jobs gone.

And that ***** Blair looks like being in for another full term, OH SHIT!!!!!!!!!!

Serpico

May I ask what similarities do you see in 2005 that you saw in 1985.

Are we on that cliff edge ?

Given that Joe public is up to it's ******** in credit could we be in for a mega reccession in your opinion ?

Ta !

Edited September 28, 2005 by crock

[Elizabeth]

And that ***** Blair looks like being in for another full term, OH SHIT!!!!!!!!!!

Whatever you think of Gordon, THAT is the sort of selfishness that has got us to where we are. Can't step aside and give someone else a go due to egomaniacal folly. Is that the "kinder, better" Britain that he promised us?

I hope Tony Blair does stay and reap the whirlwind of the next election on his own merit.

[FaTB]

Its strange that this thread should come up today, as I was only thinking on my way home on the M25 tonight, that I had not seen any cars with the new registration on them.

I believe i'm right in saying that the "55" reg came out on the first of this month, or am I mistaken ?

[dipstick]

I think Serpicos post was very honest and truly reflects the feelings of the time. I was only in my early 20's then but life was running at a much reduced pace due to social and economic difficulties.

Time for lots of re-runs of Boys from the Black Stuff then. Yossa back head-butting everyone!

[Dicky]

Its strange that this thread should come up today, as I was only thinking on my way home on the M25 tonight, that I had not seen any cars with the new registration on them.

I believe i'm right in saying that the "55" reg came out on the first of this month, or am I mistaken ?

Most modern cars are now good for 100K miles, who in their right mind would buy news and loose 17.5% on the first day. Also I think the new number plate system has confused alot of folks so much so that the vain are now longer impressed with a number that means nothing.

What year is this, what the hell does it mean, is it 2000, 2005, 2003 etc

[Spirit]

Gloomy anecdotes on C4Car...

chattin' to garage owner whilst MoT'in...when the comment arose about the local main Ford dealer.....who sold ONE new car during January...and the local Peugeot dealer who was adrift of his quota of around 50 new sales....by around 49?

They are even worried about house price falls on Ch4 Cars

Certainly fuel consumption wont be far adrift!(yep, I filled up AGAIN yesterday....two shift-changes of forecourt attendant before the pump clicked off!....this levelling out of house prices is worrying....up to now, our house has been increasing in market value at a rate just ahead of the Volvo's fuel tank needs!)

http://community.channel4.com/groupee/foru...3531#5740003531

[Jason]

Can anyone clarify: does GDP take account of inflation or is it nominal? If it is nominal, a 0.5% per quarter GDP increase indicates a contracting economy surely (if inflation is running at greater than this rate).

I've just been looking into this, and can only (so far) find this on the ONS Website:

Figures are in chained volume or real terms i.e. they have been adjusted to remove the effects of price change.

I Would assume this means it is 'real' GDP, i.e. adjusted for inflation.

Term: GDP from wikipedia

---------------------------------------

But I have just found this from the treasury website:

What is GDP?

Gross Domestic Product (GDP) is a measure of the total domestic economic activity. It is the sum of all incomes earned by the production of goods and services on UK economic territory, wherever the earner of the income may reside. GDP is equivalent to the value added to the economy by this activity. Value added can be defined as income less intermediate costs. Therefore growth in GDP reflects both growth in the economy and price changes (inflation).

Edited September 28, 2005 by Jason

[FaTB]

Most modern cars are now good for 100K miles, who in their right mind would buy news and loose 17.5% on the first day. Also I think the new number plate system has confused alot of folks so much so that the vain are now longer impressed with a number that means nothing.

What year is this, what the hell does it mean, is it 2000, 2005, 2003 etc

The picture you've attached is the old system.

Now they should look like this - AL 05 HPC

Two letters denote area

Two numbers denote year "0 -" first half of year "5 -" last half of year

Then three more letters, don't know what they denote, maybe just random.

[AgeingBabyBoomer]

Early 80s, can't remember the exact year that format

came in - '82?

ABB

[Smell the Fear]

I've just been looking into this, and can only (so far) find this on the ONS Website:

Figures are in chained volume or real terms i.e. they have been adjusted to remove the effects of price change.

I Would assume this means it is 'real' GDP, i.e. adjusted for inflation.

Term: GDP from wikipedia

---------------------------------------

But I have just found this from the treasury website:

What is GDP?

Gross Domestic Product (GDP) is a measure of the total domestic economic activity. It is the sum of all incomes earned by the production of goods and services on UK economic territory, wherever the earner of the income may reside. GDP is equivalent to the value added to the economy by this activity. Value added can be defined as income less intermediate costs. Therefore growth in GDP reflects both growth in the economy and price changes (inflation).

Thanks Jason - if we go with the Treasury definition, it looks like we are contracting. And a lot of current GDP is government spending (i.e. created by increasing the national debt). Things don't look good.....

[Serpico]

Serpico

May I ask what similarities do you see in 2005 that you saw in 1985.

Are we on that cliff edge ?

Given that Joe public is up to it's ******** in credit could we be in for a mega reccession in your opinion ?

Ta !

As I see it today is a far worse scenario, and very different from the 80s disaster, and as before it will take time to really set the bush fire going.

At that time there were credit restrictions, hire purchase three years max on new and used motor vehicles and a minimum cash or P/Ex deposit, anyone caught jacking up prices (including deposit) in the selling price was liable to lose their credit licence, and get their facility pulled by the finance house. That said anyone with half a brain would not stitch the punters with to much debt. We used to look at their finances closely and frequently give advice and talk them into something cheaper on both new and used. The idea was that if they bought something for less they could afford to have it serviced properly and have two years of drip, and come back with a nice mint quick saleable swopper for upgrade without stretching themselves, and if, as some did lose their job or were in trouble they could bring it back for us to buy or take on SOR and we could clear their debt and maybe have a few bob back as well, Joe public remembers that and they would be back to buy again when they got straight. The strategy reulted in people coming back again and again

An additional factor was that the Finance houses had more brains in those days, anyone who made an early settlement on the debt got a good discount. and if repeat buying got better terms. Now if you settle debts early you get scalped with penalty charges.

Credit cards were not used the way they are today, I only had two one bank and one Amex and only used them for travelling abroad on business.

We had survived the oil crisis and power cuts in the early 70s and the VAT increase from 8% to 17.5% without problem, it was the massive increase in interest rates and the banks ripping off their clients and getting the jitters that wiped everyone out.

Don't forget even the convicted Tycoon and Guiness scandal fraudster and big mate of Maggie Thatcher, Gerald Ronson saw his mighty Heron empire go down the tubes for £150m, no one was immune.

We also had standard rates not the crippling uniform business rates, now all businesses are so stitched with red tape it's amazing anyone survives. Sure we carried around £500K of debt to suppliers and bank/finance house, but that went up and down like a yoyo, and we always paid our suppliers on seven day settlement to get an extra discount, plus the heavy investment in spares and workshop equipment, that I might add only fetched 10% of it's true value when a car auctioneer friend spent nine hours selling everything for me , I can clearly remember one new spare part at cost £140 going for £7.

The killer today will be taxes to feed an out of control government that does not give a S**t, personal debt, retail businesses big and small need feeding all day every day just to cover overheads and expenses if they don't feed they die, then the wholesalers, importers and manufacturers die because they can't feed off the retailers. Businesses close or go bankcrupt or into receivership. Jobs go by the tens of thousands every day as we can see is clearly happening and gaining momentum right now. Just by visiting this board confirms thar, the only ones who prosper are the bailiffs and debt collectors. personal possessions get sold for a pittance at auction, houses get repossessed. Debt is like an erupting volcano it destroys everything in it's path and is unstoppable, so called consolidating debt is crime, it is just piling debt on debt for double the time to pay back.

We were lucky we got out, cleared our debts and had enough to buy a small cottage in a nice area, not much after what we had been used to, but the kind of place people are paying £200K for today. My wife had the qualifications to walk straight into a well paid Directors job in the Pharmaceutical industry. Just as well, no one would touch me having been self employed for years and people over 40 were considered finished at that time, after two years and about 1500 job applications I just bumped into a former customer a Q.C and he gave me a job in his chambers a fascinating job and guaranteed pay cheque every month. We lived well on the wifes salary and saved every penny of my income or used it to buy a few nice motors at auction every year and turn a profit.

We have never owed a penny since but we had to work past retiring age, we had surrendered all our insurance and pension policies to clear our debts. No complaints, we now live in a very nice three bed two bath house, double garage half an acre garden fantastic views, bought and paid for on the Atlantic with cash three years ago. Took twenty years to get straight and we got lucky sold high in Cheshire 2002 and bought very, and I mean very low a few miles from the Giants Causeway in N.I. The house has now more than doubled in value and still rising over here, only place in the UK besides parts of Scotland were they still are with rising. do we feel rich or smug not really it's just a nice home in a nice place to live, it would not matter if it was only worth £20 we can't spend the increase without taking on debt. We own everything we have including two nice classic cars but we still have to be careful count the pennies and sweat a bit about the price of heating oil.

So after nearly sixty years long hours hard graft, sweat and tears in business firstly two pharmacies then two retail motor trade outlets we are not any better of than a retired local authority employee with a fat pension. No complaints though. I walk to the local village with dog for a paper every morning look around and think how lucky we are. Then read the paper and see all the deep debt shit the U.K and half the population are in. Never has so much been owed by so many in history.

Like the Titanic the U.Ks Captain B******t Billy B'liar, his First Officer Brown and idiot crew is full steam ahead steering for a debt disaster of biblical catastrophic proportions, which will result in misery and poverty for untold numbers. Ocean Finance = Ocean Iceberg here we come.

Edited September 29, 2005 by Serpico

[The Masked Tulip]

Fascinating!

[Guest muttley]

Serpico,thanks for taking the trouble to write such an insightful post.

Hey,I'm a pharmacist too!

[Serpico]

Serpico,thanks for taking the trouble to write such an insightful post.

Hey,I'm a pharmacist too!

Should have stayed in it in Birmigham instead of getting smart and selling out to go into to the motor trade in Cheshire.

I'll tell you what's fascinating going to visit a 55 year old life long mate on remand in Walton, looking at a ten stretch in the big house for trafficking cannabis resin from Sri Lanka to Canada to try and save his fathers before him business for his son. Desperate situations drive some people to desperate and stupid measures.

Did I not read somewhere on this forum a poster predicting that peoples debts would result in a massive increase in crime.

[aclwalker]

This is a fascinating thread and Serpico's comments and reminiscences blow a large hole in much of the rubbish we constantly hear, like:

"It won't be allowed to happen."

"Unemployment is still low."

etc.

People fail to see that everything is linked and 1000 workers losing their job up the road could easily mean you losing yours, because it's a simple case that they can't afford to buy YOUR services or goods any more.

I worry that this time round it is going to be a lot worse, because so much of the spending of the last 5 years has been phantom, i.e. it has been money originated not through earnings, but clear debt, i.e. future earnings. This is no way to run things.

It is fascinating hearing how things were just 20 or so years ago. I was only a wee guy then but I do remember all the job losses and even then it seemed obvious to me that this would mean that they then couldn't buy anything, affecting others.

Anything else you can remember, please let us know Serpico.

[TheMadJock]

Key figures for new cars registrations up to end of August 2005.

* August market, smallest of the year, fell 2.3 per cent to 83,066 units

* Year-to-August registrations dropped 5.7 per cent to 1,554,828 units

* Diesel market continued to rise, up 10.7 per cent in August

I spent 13 years selling cars until getting a real job 3 years ago. Ex-colleugues tell me things are getting tough. Franchises are Fiat, Mazda, Honda & Nissan, plus a big mix of pre-owned cars.