Car makers have surplus production capacity of 25% based on the recent drop in sales plus c 5-10% built into the system to cater for future demand increases.
Anyone who bails out one carmaker is nuts: they need to cut capacity to meet demand as anyone who thinks this cutback is temporary and will go away by 2011 is living in cloud cuckoo land.
It may resolve by 2015 but frankly as consumers MUST reduce debt to survive and asett prices (mainly houses) are falling, sales of assets will not help if they come with debt attached.
So far not one country in the world can point to stopping deflation in its tracks apart from the Weimar Republic... and look where that lead.
The banks are now looking at writing off other bad debts: like shipping where the current capacity being built will nearly double the world supply of super big carriers at a time when many are empty and mothballed.
Nice to see banks employ modern risk management systems.
RBS was the thrid biggest lender to shipping companies..
Bank bailout V1 will be followed by V2 and V3.. and so on.
Much cheaper to jail a few (thousand) bankers and the FSA who let them get away with it and ensure it does not happen again...
Edited by madf on 16/01/2009 at 13:47
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In a posting above "smokie" says that Honda's Swindon plant is closing for two months.
But it's actually a four month shutdown !
The plant was already set to close during February and March but the shutdown will now be extended to cover April and May.
I remember that "tawse" started a thread a few months ago when he asked the question "Are Honda cars overpriced ?"
In light of this four month shutdown, maybe it's a question which Honda's UK management should ask themselves.
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I know someone who works at the Jaguar/Landrover plant in Halewood (Liverpool). Apparently the "X Type" line was designed to build 300+ cars a day and they are only building about 80.
To be honest I'm surprised they are actually making that many!
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The quality should be the best ever then now that they have far less pressure to work under .
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I remember that "tawse" started a thread a few months ago when he asked the question "Are Honda cars overpriced ?" In light of this four month shutdown maybe it's a question which Honda's UK management
Yes I did. Yes they are.
Their diesels are behind the times re CO2 compared to the likes of Ford and BMW but their prices are basically BMW for what is a mass market car.
Yes, they could get away with marketing themselves as a new BMW in the years of easy credit but that is no longer the case now as the few buyers out there seek out cheaper purchases.
They probably would have people queuing up to buy their cars if they discounted pre-reg cars the same as Ford does but I suspect the mentality in Honda UK now is that they are as good as, if not better, than BMW. Pity no one else thinks the same, least of all what few buyers there are out there.
My local Toyota dealer seems to have finally woken up to the recession and is offering 2K off their secondhand prices until Jan 31st - IMPO this now brings them in line with a Toyota dealer 40 miles up the road. The local Honda dealer is still, IMPO, selling used Hondas for 2007 boom prices whilst the Honda dealership 40 miles up the road is considerably cheaper but, again IMPO, still too expensive in the current climate.
This recession is on the way to becoming a depression. Having a car 6 months from now might be a luxury few of us can afford. I ead today that HSBC might have to raise 30 billion ASAP. Oh dear.
Edited by tawse on 16/01/2009 at 14:17
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So far not one country in the world can point to stopping deflation in its tracks apart from the Weimar Republic... and look where that lead.
Hugo Boss uniforms!
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