Wednesday, September 16, 2009

Please sir can i have some more???????

Carmakers urge scrappage renewal

******** It is now clear the only growth we have is from government stimulus ******** He said that carmakers in Europe could lose sales of 13 to 14.5 million units without the scrappage.

Posted by mark @ 05:55 PM (1308 views)
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10 thoughts on “Please sir can i have some more???????

  • Well although it is easy to see the car manufacturers point of view, stimulus plans are by their nature short lived because they just pull demand forward. In this case the consequences of extending the stimulus plan would be the collapse of car sales completely.
    The reasoning behind the scrappage deal was that car sales had fallen an unbelievable level and the industry needed temporary support ->before demand picked up again<-. If this was wrong, and that demand hasn't come back later, then continuous pump priming of the market will lead to a much more dramatic fall of in sales than currently forecast i.e. a worse situation than the current one. A shallow continuous decline in sales exchanged for a dramatic hump before collapse. Maybe they should act on the possibility that people won't be buying so many cars in the future by shutting down a few sites.... sad to say but true. If the car makers were to argue for a permanent reduction in VAT, because all the UK scheme really was a short timed VAT abolition targeted at cars (hugely unfair targeted tax relief), then they would have my blessings (such as they are).

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  • letsgetreadytotumble says:

    I see Hyundai have faired well out of this. They’re good cars. I’m on my third. However, I thought this scheme was to help the British car industry. How does that work when the vast majority of the sale price goes to the South Koreans?

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  • Look look everyone; a microcosm, a precursor of what the end of Quantative Easing and Bailouts will look like.

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  • From simple observation it’s obvious that car scrappage has worked – in spades. 09 registrations that were nowhere to be seen in the spring/early summer period are now to be seen everywhere, and now 59s also.

    So anyone who was up for a new car has now got one. Oh dear!

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  • I have just watched last nights BBC2 Newsnight programme (1 year on from Lehman collapse) using digital catch up TV feature and it seems a pretty good bet based on the debate featuring Sir Brian Pitman, Prof (ex MPC) Blanchflower etc… that when the Government intervention measures (car scrap scheme included) come to an end things will fall off a cliff ! – more stimulous cries Blanchflower, but I’m afraid it cant go on forever and the cliff edge is getting ever closer.

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  • My question is this.

    Is it actually profitable on it’s own to manufacture cars.

    It seems to me that every factory that’s ever been built inthis country is done so because the government commit billions of pounds to the project in the name of creating jobs.

    Wouldn’t it be cheaper to and more environmentally friendly just to give the workers the cash (who then wouldn’t have to work) and not build a factory that will require further handouts as soon as there’s a mild dip in the economy.

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  • 6. str 2007 said…

    “My question is this.

    Is it actually profitable on it’s own to manufacture cars.

    It seems to me that every factory that’s ever been built inthis country is done so because the government commit billions of pounds to the project in the name of creating jobs.

    Wouldn’t it be cheaper to and more environmentally friendly just to give the workers the cash (who then wouldn’t have to work) and not build a factory that will require further handouts as soon as there’s a mild dip in the economy.”

    Indeed, the workers could do something creative, start their own businesses. Just like the bank bailout money could have been given to people towards paying off a mortgage or buying a house.
    However, if you assume that pretty much every decision by big business and government is to preserve the current status quo of crony capitalistic corporate/political hegemony that serves those with power and wealth, then these decisions all make sense.

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  • little professor says:

    Wouldn’t it be cheaper to and more environmentally friendly just to give the workers the cash

    That’s exactly what they are doing in Japan: a $200 handout to every adult in the country, including all 2 million foreign residents.

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  • str 2007 makes an interesting point –

    The last remaining shipyard in Sunderland (once the largest shipbuilding town in the world) closed on 7 December 1988 – repeated requests for minor Gov assistance having been denied. The Gov instead encouraged car mfr as an alternative and has repeatedly ploughed millions of pounds into Nissan – a typical example is given below:-

    Nissan is to get £6.2million from British taxpayers to build a new car to replace the Micra at its Sunderland factory.The subsidy to the plant – in a traditional Labour heartland where the Tories have been making inroads – was announced as Prime Minister Gordon Brown visited the Japanese firm’s London office.

    Source Daily Mail 3rd June 2008

    Read more: http://www.dailymail.co.uk/news/article-1024053/Government-subsidise-Nissan-6-2m-taxpayers-money.html#ixzz0RIqhY7P0

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  • Think of the stimulus packages, scrappage scheme in this case as a dose of cocaine. The government is the dealer, the car manufacturers are the addicts. No one wants a taste of cold turkey at the moment… although that is a hastening inevitability.

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