Where now for the car industry

Is a bleak time for anyone working in the car industry at the moment, with the government determined to stop people using cars by introducing new taxes seemingly every week it is hitting car manufacturers hard. Economic experts say they think that over 35,000 jobs in the car industry could go over the next few years if things dont change. The industry has asked the government to help them financially in a similar form to the way they help the banks to the tune of around £500 billion pounds, in America the government there has already helped the industry by pledging over 15 billion dollars to car firms in particular GM and Chrysler. Countries all over Europe and the rest of the world have reported a huge slump in sales this year, with the UK reporting that this November car sales in November fell by over 35 percent compared to November 2007. “The last recession, between 1989 and 1992, had a five-year impact on the car industry,” says Professor Garel Rhys of Cardiff Business School. This year, around 2.2 million will have been sold in Britain, but Prof Rhys believes that will be 1.75 million next year, and as low as 1.6 million in 2010. “I’m not being alarmist about this,” he says. “I’m merely tracking the last recession – and this one’s worse.” Part of the problem is the speed of the fall. Decisions about production at car factories are made years, if not decades, in advance. With new cars still in the pipeline, and raw materials, parts and even entire new plants ordered and yet to be paid for, businesses cannot cut costs fast enough to match their falling revenue. Several UK car manufacturers have put their workforces on shorter hours or are planning production stoppages to reduce the market oversupply as the new cars they are producing just are not being sold. Another problem with the industry the some experts say they are relying to much on the car contract hire industry and these company's could be responsible for up to 20% of all new cars bought.

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