Of course the UK has not been very successful in owning a new car plant when you consider all the UK brands of cars that have originated from the UK and then moved to the UK car manufacturer in the sky. But what is surprising is the amount of cars that are manufactured in the UK by foreign owners. There are Honda, Nissan, Ford, Vauxhall, Land Rover, Jaguar and Aston Martin which is now back in UK hands.
So when the recent down turn in buying a new car arrived many workers found themselves on a shorter working week or unpaid holiday or even made redundant. In total contrast the used car market has stood up well to the recent recession. It seems people still need to upgrade their cars or wish to have a newer one but have decided that the depreciation of a new car is no longer and acceptable cost to the ownership of their vehicle.
It has effected the used car market in a way not expected, in that some used cars have actually increased in value during difficult economic times as demand is sometimes outstripping supply especially as very few trade ins are coming from the new car market. The government has recently stepped in with a scrappage scheme offering to reward a buyer with £2000 should they buy a new car and trade in a car over 10 years old. Even though this has proved to be a winner in Germany and a few other countries there is more negativity across here, with statements that those who currently own a 10 year old car are not in the market for a new one. Condition that state you must own the old car for at least 12 months before you trade it in, stops anyone buying an old car for the purpose of the cash back.
With new car manufacturing down, so it the car parts market also. There have been many small car parts manufacturers forced out of business because all their eggs were in one basket supplying to one factory. As is normal in these economic climes, if one large manufacturer reduces capacity many other smaller businesses go to the wall.
The latest news is that an improvement in sales is expected in future months although not a previous levels, but some car manufacturers like Nissan have decided to re-employ some workers for the expected upturn. However around the world there are many other stories going on with ownership changes likely. Fiat who themselves have been bailed out many times by the Government are currently in talks to buy Chrysler and Opel Vauxhall arm of GM Motors is one story of many.
As the bank Of England stated yesterday, no-one really knows when this downturn will change around, but lets hope it is sooner rather than later.