Car Culture: Fall of the Giants

A weekly look at what sucks in our car world, plus some good bits

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UK car production all but stopped last month. Only 197 vehicles were produced, an unheard of figure since cars moved from horse and carriage to bespoke handmade.

Jaguar Land Rover (JLR) in trouble

Jaguar Land Rover, Britain’s largest carmaker, owned by the Indian conglomerate TATA, is reported as asking for a £1 billion bail-out from the UK Tory chancellor Rishi Sunak, reported in the press amusingly as a ‘support package’ to help it survive the coronavirus pandemic. There is no mention of job protection. Redundancies are never ruled out in ‘support packages.

Born in Southampton, educated at Winchester and Oxford, those bastions of the English class system, Sunak is of Indian origin making this an auspicious time for an Indian corporation to ask for a massive gift. A billion pounds sterling puts the company firmly in the nationalised industry bracket. 100 to 1 BoJo’s bungling far-right regime will never contemplate such a thing.

Most carmakers are burning through mountains of savings every day, primarily because of the cost of maintaining and running their operations shut down costs, despite furloughing a lot of people. Still, when it comes to grabbing the nation’s taxes, shtum is the watchword.

“We are in regular discussion with government on a whole range of matters and the content of our private discussions remains confidential”. JLR Spokesperson

Falling demand from all car makers – in the UK by at least 90% – because of the lock-down, has grounded the entire automotive sector. Obviously, JLR thinks itself an entitled company. Last month JLR said retail sales for the fourth quarter, ending 31 March, fell by more than 30%, to 110,000 vehicles. In 2018 it sold about 600,000 vehicles. |This is a car company in crisis.

SKY broadcasting reported that JLR ended the last financial year with cash and investments of £3.6 billion and had access to up to £1.9 billion in credit. If used, credit means debt. Last summer the company secured £500 million in government-guaranteed loans in a deal with UK Export Finance to help accelerate electrification after it reported a £3.6 billion annual loss.

I get the feeling their former talented Scottish head of design, Ian Callum, saw the writing on the wall and got out of the company in the nick of time.

Nissan in trouble

Nissan is closing its Barcelona factory with the loss of over 3,000 jobs, holding onto its Sunderland plant meantime. This disaster causes great rejoicing from the right-wing jester Andrew Pierce not just because he is happy to see it affect Johnny Foreigner, but because he thinks the Sunderland plant is safe. It is not. Sunderland is still in jeopardy.

In a tweet, omitting to point out Nissan, like JLR is in deep doodoo financially, he said:

“Nissan to shut its plant in Barcelona with the loss of 3,000 jobs but its sticking with plant in Sunderland. the reverse of what the Remoaners said if we dared to vote for Brexit.” Andrew ‘ToryBoy’ Pierce

No one has gloated in the press over the potential of Nissan-Sunderland axed because of pulling out of the EU, warned it could be a causality if Brexit went ahead, yes, hoping it would close, no. Even if it gets a long-term stay of execution how does that prove Brexit is a raging success?

Reading auto pundits drivel gets very boring after a while. Perhaps that’s their plan, that we don’t notice what the right-wing are doing while we are shocked at the behaviour of underboss Cummings or the stupidity of Sunderland car workers voting for Brexit.

Renault

The French carmaker Renault plans to cut 14,600 jobs as it tries to save €2 billion in a savage restructuring programme prompted by the pandemic. The company will cut 4,600 jobs in its French operations, which will undergo a major reorganisation, and another 10,000 around the world.

If you don’t own a Renault you won’t be worried. If you do own a Renault car you might be justified in wondering what that will do to your local service dealer.

Carmakers keep a tight grip on franchised showrooms, how they present the vehicles, how they do deals with buyers, and the provision and cost of spares. Only a few years ago, Edinburgh’s Honda dealer for over forty years found itself dumped in favour of a new out-of-town swanky showroom and an outfit to run it. Car makers are among the most ruthless cost cutters on the planet. They always begin with loyal staff.

Renault’s closures could include a foundry in Brittany and either the Douai or Maubeuge plants. Major changes are under consideration at factories in Flins and Dieppe. The carmaker will also abandon producing combustion engine cars in China, with Dongfeng buying out its joint-venture partner.

Unless Nissan, still linked to Renault, decided to make a Renault model at Sunderland, no one should place a bet on its safety for another decade. Meanwhile, Nissan has asked the Japanese government for substantial aid and appears to be getting it. I’d like to think the investment showed up in better built cars.

McLaren

McLaren is one of England premier supercar companies,that decided to go BIG and aim for the wealthiest set in society, Monte Carlo included. It also decided to return to Formula 1 racing, a crippling cost for even the most cash rich company. This week Williams Formula 1 Team posted a loss of £13 million for 2019 and is now up for sale.

Appeal plummeting in pandemic times, McLaren also failed in its request for a £150 million emergency loan from the government, a serious blow. JLR got their docket in first. McLaren has burned through £257 million in the year up to 20 April, with bleeding expected as lock-down continues worldwide. In keeping with almost one million other British businesses the group has furloughed staff and implemented temporary pay cuts for the few working. Production at Woking was suspended in March.

With the cajones of ace cricketer Ian Botham on crack, McLaren boasted it was taking on Ferrari as the world’s premier sports car maker – Lamborghini tried that once, now owned by VW. McLaren. It duly borrowed megabucks to build a space age factory on England’s green and pleasant land. All went well at first, the cars were admired, drove divinely, their looks less admired, until owners discovered resale values dropped 40% in a few months, on a good day.

“We’ve found a stealthily specced example going for £82,950 – almost a 50% fall from its price when new.” Autocar magazine

Delusions of grandeur ran ahead of reality. Limited-edition McLaren’s can cost as much as a small passenger plane: the windscreen-less Elva will cost a reported £1.4 million before options such as a 24-carat gold engine heat shield are included. Yes, we live in crazy times.

Back down to earth: there are no McLaren showrooms. You cannot walk into a McLaren showroom near you to check out their cars or extras. Wealthy buyers want to see their purchase before handing over £163,000 for a McLaren’s GT, a road car, yet are asked to pay up, wait months, and then take delivery.

In any event, ask yourself, if you had the money, would you buy a McLaren or a Ferrari?

Aston Martin

When the latest James Bond film was dry docked until later in the year the biggest groan could be heard emitted from carmaker Aston Martin. They have both the classic DB5 and the latest zoomy version in the new 007 movie, great advertising too late to boost orders.

Aston Martin sacked its chief executive, Andy Palmer, this week and without warning – he read of his sacking in the press – following a 98% collapse in the luxury car company’s share price since it floated on the stock market less than two years ago. The company has replaced Palmer, who has served as Aston Martin’s CEO since 2014, with an executive from Mercedes. Wonder why the executive left Mercedes?

Still, though the company has its back to the wall you can pretend you’re Sean Connery or whichever actor you like best in the role, you can buy a replica of 007’s car with all the gadgets, ejector seat too, a limited edition of 25, so long as you can cough up £3,3 million.

And finally, VW, some good news

This week Volkswagen lost a case in Germany’s highest court in the land against a single owner of a second-hand diesel powered minivan who claimed he had been deceived as to its emissions capability. The court said he should be awarded 25,600 Euros for the used-car purchase he made for 31,500 Euros in 2014. Sounds a fair deal to me. He had four years use.

VW is legally bound now to offer compensation, a replacement vehicle of the same value or the cash… and all the other diesel minivan owners.

The shock verdict applies to vehicles with rigged diesel engines in Germany, meaning it sets the precedent worldwide, though VW, as has been its habit in such cases, will do all it can to block claims internationally. This is a just but truly calamitous blow to the automaker almost five years after its emissions scandal erupted.

The ruling by Germany’s highest court for civil disputes will allow owners to return vehicles for a partial refund of the purchase price serves. It is a template for about 60,000 lawsuits that are still pending with lower German courts.

After years of dismissed protests about cars taking over the world and governments tarmacking  the green earth and the arid desert, we see Mother Nature doing it better by sending the Grim Reaper’s scout to bring car makers to their senses if not to heel.

I chose those companies as examples of the collapse of old ways because they are symptomatic of the two great ills of the motor trade: walking a tightrope by serving only the rich, a diminishing return unless you can keep values increasing, and making far too many vehicles you pile up in fields and sell to customers when they are already two years old. In those circumstances, rich or poor, the buyer is always the loser.

GROUSEY’S FOOTWELL FINDS

Best wee second-hand buy

Regular readers will know I had to drop a search for a small SUV for friends while no one is allowed to move beyond their local supermarket, and only if an essential journey, such as starving to death. I got asked a similar question for a small city car and remember I liked the VW Lupo with the its pleasant blue instrument illumination. I’d recommend the biggest engine variety – you need that burst of speed to get you out of trouble when overtaking. Prices don’t reach higher than £5,000 for a four-seat GTi version. A light car, it can cover 0-60mph in 7.7sec, and it has more character than its modern equivalent, the Up GTi. Get an MOT in with the price or walk away.

Big Rig Trucks

The truck industry is getting hit as hard as motor companies. I read the chief executive of the Road Haulage Association said coronavirus had ‘decimated’ large parts of his ‘sector’. After Beeching wiped out 70% of British rail – one of the easiest ‘rationalisations’ ever for a fat fee – the road haulage business grew and grew. So did the size of the trucks. Almost every year they add more tonnage, more wheels to carry it, and damage more bridges. I for one won’t miss fewer trucks on our road, but I have a soft spot for the red and green of Eddie Stobart trucks – they are kept spotless and driven by courteous truckers.

Unequal equality

West Granton Access, a long semi-rural pavement in Edinburgh, has been divided into two parts with a thick white line, two-thirds for cyclists, one thirds for pedestrians. Pedestrians include parents with children, mothers with prams, joggers, dog walkers and individuals glued to their iPhone. The width allotted to them is so narrow they have to step into the path of cyclists to keep a safe distance. Just to pass someone coming in the opposite direction forces them out of the pedestrian lane. To gain safety they have to lose safety. Ludicrous planning, Edinburgh council. Well done.

Happy motoring!

 

 

 

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