Perchance a glimmer of hope amongst the gloom?

Today’s news contains much of what we’ve been experiencing all week, all month, all fourth quarter – cuts, cuts, cuts, as both Renault and alliance partner Nissan announce production hiatuses. No change there then.

And don’t even get us started on the possibilities of the US government bailing out Detroit – principally GM – or not.

But there were, at last, a couple of glimmers of light. Yes, Ethel, we know even once-booming emerging markets have shown signs of faltering with growth much diminished. But just seeing the word ‘growth’ in a news report or press release is a bonus these days. And we have.

First, came a report from China of the head of Honda’s unit there still seeing some growth in 2009. He noted that negative growth rates had been posted in July and August this year, and predicted that next year would remain tough for the industry, but added that China should still outperform US and European car markets. Gotta draw a bit of hope from that. The west may remain in the doo-doo a while longer, but at least someone, somewhere, will still be writing sales reports with black ink.

Today, from Our Man in Brazil, arrived another little glint of light. One of Brazil’s most respected analysts has polished her crystal ball, plugged in the computer, opened up a spreadsheet, and developed three scenarios: “The worst points to a drop of 5% in domestic sales versus 2008, or 2.85m units (cars and light and heavy commercials). In an intermediate situation, a growth of up to 3% is possible. The optimistic result sees something around 5% to 10% [growth] over 2008, totalling up to 3.3m units sold, imports included.”

That word, again, growth. At last.

Another bit of good news was the Aussies getting a bit of a boost from their feds in the form of a A$6.2bn aid package to the auto industry which extends beyond the three foreign-owned car makers (GM Holden, Toyota and Ford) to component makers, many of which are in trouble as output slows and after Mitsubishi said “sayonara” to local manufacturing back in March. Many commentators have predicted the eventual death of car-making in Australia, and this may only prolong the inevitable, but we shall see. The package includes help to develop ‘green’ vehicles but the automakers will still have to contend with reduced ‘protection’ from imports when duty is halved to just 5% in 2010.

I can recall using a ‘glass sparkplug’ device that helped with tuning cars back in the ’80s (you adjusted the fuel/air mix in a device called a ‘carburettor’ to get a nice blue flame) but what about seeing the oil sloshing about? Clever boffins in Japan’s nuclear industry have worked out how for Nissan which announced the innovation this week.

Another bit of good news this week was research that showed that most of the 6,000 or so workers turfed out when MG Rover went bust early in ’05 are back at work elsewhere, albeit not necessarily as well paid as they once were. All credit to the agencies involved but there is a political element in the announcement as we have had several major, mostly non-auto, job loss announcements this week here in the UK and there are predictions of up to 3m jobless next year. With GM in trouble in the US, there are nervous eyes on its 5,000 British employees but there have been reports European factory closures are unlikely. Again, we shall see.

Some more good news: Abu Dhabi is soon to host the largest Mercedes shop in the world and one of its products and its local factory have topped a South African JD Power survey.

After last Friday, all this was a pleasant change.

Enjoy your weekend,

Graeme Roberts
Deputy Editor