Guiding consumers since 2009

Downturn fuels car makers' worries

By Staff Writer
Compare banks and save with Justmoney

Downturn fuels car makers' worries

Globally car manufacturers are starting to feel the full effects of the credit crunch with less new cars being sold.

The Mail and Guardian reports that at the worlds biggest car show, The North American International Auto Show, sales are not looking good for the rest of the year, and companies that are the beneficiaries of huge bailout are still under pressure and struggling to survive.

As one attendee put it 'I have seen a better mood at funerals'.

Apparently the only things causing any sort of buzz and hype, were green and electric related technologies. There were demonstrations outside by disgruntled employees who have lost their jobs, despite the bailouts.

In South Africa the Dispatch reports that according to the National Association of Automobile Manufacturers of South Africa (Naamsa) new vehicle sales are expected to show an improvement in the back half of 2009. However due to the state of the economy globally, exports of vehicles and components are expected to remain depressed. Exports to other African countries were expected to improve marginally. Naamsa released figures that showed a 27.1% drop in new vehicle sales for December 2008 compared to December 2007.

Business Report tells us that it is not that bad for everyone though. VW the German car manufacturer set a sales record last year and managed to expand its market share regardless of the current economic troubles.

As they put it 'This shows that our group's multi-brand strategy is paying off and our young and attractive model range is popular with customers all over the world.'

A lot of the American car makers problems seem to spring from a lack of adaptivity and a general ignorance about where the rest of the world wants to go. Those massive gas guzzling monsters that may go down in Nowheresville, Idaho, just won't cut it on the streets of Munich.

In August VW had overtaken Ford to become the world's third largest auto manufacturer after GM and Toyota. Fin24 also followed this story.

Business Day came in with a story about McCarthy Motor Holdings, who said that they are feeling the effects of the crisis and will be closing 28 dealerships in the first quarter of this year. They said the cause for this was soft demand and high associated costs. They also said that this was the worst downturn that they could remember. The trend before the crash was for massive investment in the industry with an expectation of it growing further, however now there is an oversupply of dealerships and some are starting to close down.

New vehicles are not expected to drive this market and dealerships are swapping their focus over to the used car market.

Justmoney says if you want another car, rather than spend too much why not get car finance for a second hand car, or one that does not use as much petrol or cost as much to run?

The new car market might pick up at the end of the year, so if you really want a snazzy new car, get a savings account now, save up your deposit and buy your self an end of year present later.

Recent Articles

Featured How are you taxed on your retrenchment package?

Unemployment is one of the biggest problems in South Africa. The emergence of the Covid-19 pandemic has exacerbated the situation with a lot of companies retrenching their employees.  When retrenched, you’ll receive a retrenchment package, but do you know how much tax you’re liable for?

Car repossessed – don’t be taken for a ride

When the country is facing an economic downturn, chances are your finances will feel the pinch. This can lead you to make bad financial decisions such as skipping your vehicle payments. But every decision has consequences and if you don’t pay your instalment, the bank will repossess your car. But what can you do when this happens?

 

Why you should consider gap cover

Your medical aid should protect you from incurring large medical bills when you’re sick. But what if your plan doesn’t cover the full cost of your medical expenses? We got in touch with insurance experts to find out whether gap cover is worth having.

Debt relief - What is your bank offering?

Going through a financial crisis is stressful whether it be as a result of losing your job, being short-paid, having to fork out towards an emergency payment, or finding yourself in the midst of a global pandemic. This is especially taxing if you have a debt to service. It is against this backdrop that banks are increasingly offering payment holidays. Justmoney looks at the various debt relief options available to you from the big five banks.

Deals

Office furniture at discounted prices at BDK

Price: Available on request
When: Daily
Where: Johannesburg

Da Vincis Happy Hour Special

Price: Available on request
When: Daily
Where: Cape Town

Use your Absa card and get 30% cashback at Dis-chem

Price: Available on request
When: Daily
Where: Nationwide


Latest Guide

Guide to debt rehabilitation solutions