Blog: Dave LeggettPlus ca change..

Dave Leggett | 30 May 2003

The news that residuals are collapsing in the UK due to 'over-production' isn't too surprising (there's never been a better time to buy a 2-3 year old car). And the reluctance of manufacturers to cut production isn't either. No-one, if at all possible, wants to be open to the accusation that they are losing out in the marketplace.

It reminds me of the days when I worked as 'Senior Economist' at the SMMT and part of my job was to collate UK vehicle market and production forecasts from vehicle maker participants. We'd then meet up and thrash out an official 'SMMT forecast' - the same procedure still operates today I believe.

Each maker duly submitted UK Total Industry Volume (TIV) sales and production numbers as well as - and this is where it got interesting - a production forecast for their own firm. Now that was truly fascinating information to input into a spreadsheet. 'So manufacturer X thinks it will reverse its declining trend and hit a 20% year-on-year gain by the end of the year does it? What does that mean it has to do in the last four months of the year? Why, that figure is absurd!' All very political and very sensitive of course. Needless to say, if you added up what the individual makers believed (or said they believed) they would do, you got to a total production TIV number that was well in excess of what was seen by all as a reasonable TIV production forecast. Yep, it's always the other guy who stands to lose and overcapacity in the industry? Don't look at me, it's not my problem guv. And it never is.


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