The auto industry is showing the first deep scars of a recession from UK to Japan and all around the world. New car sales in the UK dropped by 23% in October, the highest in 17 years according to the SMMT (Society of Motor Manufacturers & Traders). It has also cut its forecast for 2008 by 10% over 2007.
The new car registrations in Europeâ€™s biggest car markets in November were as follows:
â€¢ France drop of -14%
â€¢ Spain drop of -50%
â€¢ Italy drop of -30%
France has held up well for most of 2008 due to strong incentives for low-emission cars (Renault and Peugeot obviously) but is starting to show serious declines as well.
UK and Germany data not in yet. Germany has been more or less flat until October, but should also deteriorate quickly as German car sales fell 18 percent in November, marking the fourth consecutive monthly decline.
Big losers remain Ford and GM (Opel); the news-flow about possible bankruptcies certainly does not inspire much confidence at the consumer. General Motors reports $4.2 bn operating loss and it suspends its Chrysler merger talks. Ford also suffers $3-bn loss in Q3.
However, no carmaker is able to escape the malaise.
Japanese automakers are facing similar to their international peers problems. Isuzu Motors Ltd. and Mazda Motor Corp, will slash at least 2,700 temporary jobs in Japan as the companies reduce vehicle output production as a result of falling demand.
Hino, the countryâ€™s largest heavy-duty truckmaker, will also halt production at a Tokyo plant for five days in December, said spokesman Hidenobu Tezuka. Tokyo-based Isuzu slashed its fiscal full-year net income forecast 53 percent this month and Mazda lowered its forecast 29 percent in October.
All the eyes focus now on the second bid for $25 billion in funding that is to be presented to Congress by the three major US players (General Motors Corp., Ford Motor Co., and Chrysler LLC) today. Their first bid was turned down with some members of Congress urging the â€œBig Threeâ€ executives to take major pay cuts as part of the deal.