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The Immediate Future Of The Car Industry Is Not Rosy

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By : Bill Williams    99 or more times read
Submitted 0000-00-00 00:00:00
The car industry at present not only has to cope with a financial crisis but it is being forced to redesign cars to cope with satisfying the environment lobby in their quest to reduce carbon gas emissions to help prevent global warming.

The world credit crunch and banking crisis is not confined to the financial sector alone, industry in general is hurting and none more so than the car/motor industry.

With a global workforce estimated near the 50 million mark when all the ancillary parts of the industry are included, starting with oil exploration, every car part manufacturer making different parts for different models, tyres, windows and windscreens, engines, fabric for interiors etc., any hiccup in this business which halts sales sends a chill wind around bank managers worldwide.

The current economic downturn for the car industry has also coincided with a combination of high energy costs and also increased raw material prices, matters outside their control, however that oil controlling cartel called OPEC once again not content with the extra BILLIONS they have just made from the $100 dollar temporary leap in a barrel of oil have just announced they are to cut production by 2.2 million barrels per day. in order to try and get the oil price UP again.

Talk about shooting yourself in the foot, how can these producers look anyone in the face ever again? Justice may have been done though, as since the cut was announced oil prices have continued to fall.

By the way it is not only oil cartels who are not allowing us, the public, to ease our financial burdens. When Gordon Brown, the UK Prime Minister, criticized OPEC for their recent cut back in production an OPEC official abruptly retorted that Brown was not helping to ease the pain caused as his government took over 70% of the pump price in taxes and should act to reduce this tax burden. Touche

The depth of the current downturn is now evident with car sales at an 18 year low and car makers around the world are having to re-finance their whole businesses.

This last statement itself raises a major question. Car manufacturers globally are asking their governments for loans in the hundreds of billions of dollars.

Ok car sales are acknowledged to have fallen through the floor recently as a result of this crisis but it makes you wander how well financed these companies were prior to this crisis arising.

Toyota recognized as the worlds largest car manufacturer is expected to post quarterly losses of $1.1billion.

BMW of Germany is reported to be supporting its German dealer network to the tune of approximately $133 million to aid home soil sales.

Still in Germany, the biggest European car maker Volkswagen is to discuss cost cutting while the biggest European car parts manufacturer Bosch is planning to cut 2000 jobs.
Renault chief executive Carlos Ghosn has stated that he does not see a quick end to this downturn adding that he thought the bottom of the market had not yet been reached; Renault are expected to shed 2000 from their workforce.

Ghosn is also quoted as saying that "this crisis is more serious than that of 1992-93 which took 5 years to recover from"

During the 92-93 crisis the recovery came about under different policies from individual governments and without cohesive action, then there were no multi billion dollar loans to refinance industry, so given that the 92-93 crisis is reported to have taken 5 years to recover from the question on all lips now is "how long will the car industry take to recover given that they will have all these billions of loans to repay whilst at the same time try to rebuild their industries and keep their bankers as well as their share holders happy"

The business environment for the future is not rosy, car manufacturers are struggling with financial worries and the pressure is on them to also satisfy the green lobby with reduced carbon gas emissions to reduce global warming.
Author Resource:- Bill is now retired but as a keen motorist has driven on most continents of the world and has a keen interest in environmental issues, these account for only a couple of his many varied interests. For further info on the Water4gas fuel conversion system please visit..
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