Car maker's blues

Auto manufacturers around the world are in trouble

With the exception of Porsche the global motor industry is in a horrible state. Porsche have just reported pre tax profits of €8.75 billion (that's around R90 billion at today's volatile exchange rate) with €6.8 billion of that generated from option trades in rival car maker Volkswagen, which briefly became the highest valued company in the world recently. So Porsche win the industry award for extreme cleverness and they have the added satisfaction of knowing that they buried a few supposedly savvy fund managers in the process. Elsewhere in the motor industry things are not so good.

The major US car makers lose well over a billion dollars a month and have growing inventories of unsold gas guzzlers. The Brits and the Europeans are having a rough time and even the wily Japanese are taking strain. So the obvious answer is to ask  governments for money. US President elect Barack Obama has already announced the bail out of the US carmakers as a priority. Whatever happened to the cut and thrust of good old capitalism; the survival of the fittest? First the banks, now the car industry and heaven know what next. If the luxury watch industry stumbled on hard times would the government bail them out? Of course not because people can do without luxury watches but they apparently can't do without luxury cars. If that doesn't sound convincing don't worry....it's not supposed to.

On the whole the motor industry has got itself into this mess over the years by producing the wrong products and it's iniquitous to expect taxpayer to bail them out. For example, the rivalry between the German big three to produce ever more powerful and expensive saloons is great if you happen to be a motoring journalist but what relevance does it have to the real world? Mercedes produce an AMG version of their C class so Audi have to up the game by producing a very fast version of the Audi A4 and obviously BMW don't want to be left out so they produce a hectically manic version of the three series. Then Mercedes get cracking on an even faster C class and so it goes on. None of these cars are cheap and while they may be fantastic to drive on a racetrack they have absolutely no place or relevance on most country's roads. Their prime function is to announce to the world that your bonus was bigger than everyone else's or, more likely, that your level of indebtedness is bigger than everyone else's. Even if you wanted to crank the beast up to its cruising speed of 240km/h you couldn't because either the roads are too potholed or there is some chubby chappy sitting in a bush with a radar speed trap.

The greatest skill of any good motoring journalist is to be able to keep a straight face while telling people that R1.3 million spent on a sports car is a great buy. Quite simply it isn't. Unless you're passionately in love with that new car smell (and you can get it in an aerosol from a second hand car dealer if you want) or very rich then you have to be an idiot to buy a new car these days. Which is exactly what the Americans have already discovered and what anyone who has tried to get out of their finance deal in this country has almost certainly discovered.

An executive barge in the R800000 price range will sell for R500000 a year later if you're lucky. A Golf Gti will depreciate by at least R5000 a month over the first year which puts its real monthly cost at around R11000 if you include financing and insurance. After tax that's a heady sum to pay to drive a bog standard hot hatch.

Although very few off roaders ever go off road I like SUV's and bakkies because you can T-bone a taxi and stand a reasonable chance of survival. What I don't like are the absurdly powerful engines they put in them because they guzzle fuel. It's like taking the editor of the Sunday Times for a drink at Katzy's. Unfortunately the motor industry think SUV's and bakkies should perform like sports cars which is why they shove 5 litre engines in them. Driving a thirsty SUV is the new real fur....before long eco-warriors will be pouring red paint over vehicles that are perceived to be using more than their fair share of the planet's resources.

Bailing out the global motor industry is obviously related to preserving jobs and you can't really blame politicians for wanting to spend tax payer's money to keep voters happy. On the other hand isn't it time the motor industry came to the party and produced cars that are relevant for the modern world? As roads become more congested and better policed (or worse policed, depending on your point of view) any car that has a top speed of over 230km/h is pointless unless you are lucky enough to have your own airfield. Gas guzzling SUV's may be the preferred choice of the black diamonds and the VIP protection people but they are anti social. If  I'm not allowed to light up a cigar in a shopping centre then why should someone else be allowed to drive a car that gulps 35 litres per 100 kms in city traffic?

Fortunately the credit crunch and falling second hand car prices will do a lot to persuade the motor industry that the good times are over but a bit of government pressure in exchange for those billions wouldn't go amiss. And when Porsche eventually decide to bow to the greenies and come out with a 1.3 litre family hatchback you'll finally realise that the golden age of motoring has gone for ever. Remember you read it first on freeracer.  

Services Subscribe to newsletters News feeds

Print story    Email story Related Links Articles:  Hit the road Car maker's blues

COMMENTS