Though gloomy news, like Toyota‘s Q3 meltdown (only the brave should venture to the bit about the full-year forecast), continued to roll across the just-auto.com newsdesk this week – no surprises there, then – there was, for the first time in months, perhaps just the first speck of light at the end of what is proving to be a very long tunnel.
In the financial and consumer worlds, confidence is king and, it has been said, people can talk an economy into a recession. But I reckon the talk is turning. A little optimism is starting to trickle through the prevalent gloom.
Although you’ll have to read almost to the end, there’s a few hints in here that maybe bottom has about been reached, if not the start of recovery.
Normally, when the monthly US sales data comes out, it’s Ford’s top number cruncher George Pipas you see quoted most. This week, though, it was president for the Americas, Mark Fields, who took the limelight at a media gathering at the automaker’s Dearborn HQ and, among other things, opined that maybe, just maybe, retail sales bottom might have been reached.
“The headline number was the drop in sales,” Fields said after the Blue Oval’s tally tanked 40% last month, after a not entirely unintended 80% plunge in low-margin sales to fleet buyers such as rental companies.
“When you strip away the fleet portion of that and you just look at the retail side of it, the retail (annualised rate) in January was about 8.4m or 8.5m units. If you look at the last three or four months, it’s been in that range so I think we’ve found some level of stabilisation on the retail side of the business.” And he was encouraged by Ford’s market share increasing for the fourth consecutive month.
“You’re seeing all the action that Treasury and the Fed have taken in the past six months to put liquidity into the market place,” added Fields, noting that the administration of President Barack Obama is also pushing ahead a major stimulus bill to boost the economy: “That’s up to US$900bn and there’s obviously going to be something in there for construction and consumer spending and that’s encouraging,” he said.
Echoing calls here in Europe, Fields added that some form of tax break for consumers purchasing new vehicles would also help.
And, it appears, cloth-eared EU and individual states are finally realising – duh – that good auto sales = good economy. As Our Man in Brussells reported this week, the European Union (EU) has unveiled a plan to offer subsidies to consumers who want to replace their old cars with new.
Czech deputy prime minister and EU president Alexandr Vondra told the European Parliament in Strasbourg that his government had ordered the European Commission to draft proposals for an EU-wide scheme of car “fleet renewal”, spreading existing national subsidy schemes [such as the ‘Prever’ scheme in Spain and a new programme recently announced in Germany] for scrapping old cars across Europe. Vondra wants quick action, with formal proposals drafted in time for the EU’s spring summit (19-20 March) in Brussels.
As Our Man in Spain wrote today, struggling Spanish automakers are gagging for such a boost – manufacturer’s federation Anfac urged the government to introduce a EUR1,000 programme similar to those recently introduced in France and Germany to spur new car sales, succeeding the hugely popular Prever scheme which the Spanish government axed last year, as sales were forecast to fall 23% this year after plunging 40% in January. Spain’s share of European car manufacturing could fall by a third in 2011 if nothing’s done to sell more cars, Anfac claimed.
Here, in a UK beset by snowstorms said to be adding billions more in unwanted costs to our economy, our very own struggling auto industry was clobbered with 850 job losses at Ford, prompting an immediate strike threat from the key union, Unite. And, on top of the recent government help primarily aimed at automakers, the association representing leasing companies called for a scrappage scheme as did the aforementioned union, Unite.
So the cavalry might, at last, be on the way.
Meantime, we learned that China looks like pipping the US to the post for auto sales this year, and that things, financially, are still not rosy at key Tier One suppliers or at other Japanese automakers besides Toyota. And it may be bye-bye to Korean SUV specialist Ssangyong, too.
So, still plenty of bad news out there but, for the first time in months, a flicker of hope burns maybe?
Enjoy the weekend,