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

Electric car manufacturers are having a very difficult half this year as unit sales continue to plummet to new levels. Going by statistics, electric car sales have come down drastically to just 156 against a healthy 374 for the same period last year, a staggering decline of 58%.

The turnaround happened only a few months after Nice Car Company, one of London’s two electric car distributors, had taken over reins as the administrator.

It may be mentioned that Nice, set up by ex-Lotus colleagues Julian Wilford and Evert Geurtsen in 2006, had been selling an all-electric version of the French-made Aixam Mega. There were also plans on its part to expand the existing range by the end of the year by selling a Chinese-made two-seater called MyCar and five-seat MPV called the Ze-O.

The plans however, now appear to be a distant reality provided the given circumstances. Meanwhile, administrators are being called up by the stake holders to provide the logic behind the emergence of such a situation. Top selling brands like Going Green are also facing the heat with comparatively reduced sales.

Going by a conservative survey there are around 1,100 all-electric cars plying the UK roads. Many of the owners turned electric to take advantage of a policy that exempted electric cars from congestion charges and allowed parking congestions.

The nemesis of this infant market turned out to be Ken Livingstone’s plan to exempt standard petrol and diesel cars with sub-120g/km CO2 emissions. So we will have to wait awhile before the electric car is as prevalent as the electric toothbrush. Even though the plan in question was later scrapped, it had already done enough to lure away potential customers.

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.