Well, we are coming to the end of the first decade of the 2000s. It has been a particularly hard decade for the car industry. What with Rover declaring that they are bankrupt back in 2005, governments across the world increasing the tax on fuel guzzling vehicles, oil prices going sky high, the big car giants such as GM requiring government loans and the situation that we now found ourselves in – a recession. It’s difficult to see how the likes of Mercedes, Vauxhall, BMW, Honda, Volkswagen, Peugeot, Renault, Toyota, Honda and Ford will get out of this mess.
In the UK the car industry with experience even more difficulties as government incentives which aim to increase spending start to come to an end. VAT is set to increase back to its former rate of 17.5% if not more. The government scrappage scheme and VAT have to a certain extent increased the sale of new cars. The problem is that the government scrappage scheme is likely to run out of money in the next few months which is bad news for new cars. Even worse news is that although incentives and other promises might be made about taxation and other important issues that affect consumers and business there will be an election before June 2010. As previously seen election promises aren’t always fulfilled.
The global recession has affected the car industry severely and even though consumer confidence is steadily increasing the industry as a whole probably won’t recover for another decade. This however is nothing new in the UK. The UK car industry has suffered since the 1970s either with poor management, impracticably owned by the UK government, uncompetitive, badly made cars, strikes which led to bankruptcy or the failing car manufacturers were purchased by companies based overseas.
Car companies are looking to the future though. Car manufacturers have invested into electrical, hydrogen efficient and other renewable energy cars. Lord Mandelson will be pleased with this advancement into renewable fuels but it will still take some time before cars are able to totally run without using fossil fuels. Toyota is probably the best known for producing a car that uses petrol and electricity with the launch of the Toyota Prius over a decade ago now but more are likely to follow.
It will be interesting to see what happens to the car industry over the next decade. Will all of the manufacturers survive the storm; will we all be driving electrical cars and what will happen once the UK government incentives stop?
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