Automobile News

The worldwide economic crisis has entailed huge consequences to many big name Japanese automobile manufacturers, such as Toyota and Honda, that are normally resilient in the face of such pressure. Struck by unfavourable economic conditions, sinking demand in North America and Europe, as well as a strong Yen, Japanese carmakers have seen losses pile up and exports plunge. After the typically stalwart Toyota posted its first ever recorded operating loss and opted to cut production, including closing down domestic plants for 11 days, other companies are following suit. The latest cost cutting measure by Honda has hit the UK as well, as the manufacturer opts to shutdown its Swindon plant for a full two months, in addition to cutting domestic production of its automobiles in Japan by 56,000.

Honda had already announced its intentions to close the plant for the months of February and March, as the company has now decided to extend the stop in production into April and May. While the production cuts do entail lower wages for the Swindon plant workers, Honda insists no redundancies for automobile plant workers are on the horizon, and that the measure will in fact safeguard jobs. Workers have nonetheless expressed unease at the move and are afraid of what will happen next. Aside from the removal of 3,100 temporary jobs in Japan, Honda has not made significant cuts to its workforce, which includes 4,200 employees in the UK.

The car sales statistics in Europe are no less reassuring than those in the rest of the world, as December saw car sales in Europe fall by a staggering 17.8%, to an overall 7.8% decline on the year. The yearly decline was the worst in 15 years and the numbers do not bode well for any carmaker, including Honda. The forecast is even more grim in the UK where new car sales fell by 21.1% in December and unemployment recently hit an 11 year high.

Tags for this article: economy, honda, sales, swindon

Keeping tab of changing economic times and various other issues confronting the automobile industry, Japanese car giant Toyota has come up with a band new model, namely the Avensis. Speaking on the sidelines of its release at a glittering ceremony, Toyota UK corporate affairs director Clive Bridge said that the current economic situation is the most opportune time to come up with a new model, and also stressed that the model in question is one of the company’s better products and should go down well with the discerning public.

It is important to note here that the this new model has come barely two months after the company has abruptly suspended the production of the night shift making the Auris, albeit temporarily. The production of the model is scheduled to take off again from March, 2009. Meanwhile, the workers working at the unit have been redeployed on community projects.

Toyota seeks to employ more than 4000 people for the production of this third generation Avensis, to be built at Burnaston, Derbyshire.

The company has a lot at stake with the launch of the new model as it by its own admission for the last few months has been going through tough times. Its quarterly profits were far from satisfactory forcing it to redraw its earning forecast for the current fiscal year. Most notably, it took a pounding in the three months leading to September as its net profits shrunk by a dreaded 69%, which was a clear case of economic slowdown in the US influencing customer spending.

Mr. Bridge however, exuded confidence that the model would do well and appeared to be pretty upbeat considering the warm reception it garnered at the recently concluded Paris Motor Show. The years of toil and sacrifices made by the workers to develop the advanced model fully stocked with extras, like high-powered car speakers, will bear fruit, he hoped.

In what should set the alarm bells ringing for the automobile industry, car sales have taken a nose dive in the UK, with October 2008 figures standing at 128,352, a sharp decline of 23 percent on October 2007. The scenario is even more pathetic for the private sales which by contrast have seen an uncharacteristic decline of 28.8 per cent.

The situation is so critical that the October decline has been rated as the worst year-on-year monthly drop since June 1991. The unhealthy trend first started in August and September this year, and gained momentum in October. Many automobile peripherals, such as sat navs, entertainments systems, multimedia monitors, and more, have witnessed equally staggering declines in sales figures. Many have credited the slump to the credit crunch that is gripping the nation.

Society of Motor Manufacturers and Traders (SMMT) executive Paul Everitt has acknowledged the difficulties surrounding the automobile industry and stressed that firm steps are the need of the hour to restore customer confidence and entice buyers back to the showrooms.

He even hinted that cuts in interest rates with the benefits being swiftly passed on to consumers are a probable solution. Scrapping planned increases in vehicle excise duty (car tax) and maintaining public expenditure on new vehicles are also believed to be essential part of the package required to bail out the industry from the turmoil. Paul in addition, also emphasized that the time is here for the European Union to take a cohesive step towards ensuring support for a continued investment in new, lower carbon vehicle technologies.