The faintly ridiculous side of the motorcar business
As a long-time surveyor of the UK, European and world motor industries, Iain Robertson lets rip on some of the anomalies, the oddities and several of the issues that highlight the motorcar scene’s presently more curious aspects….
While there is no avoidance of the fact that, in the UK at very least, the motorcar business is sizeable, providing jobs to hundreds of thousands of people and, in the process, earning valuable tax revenue to The Exchequer, it can be almost too easy to lose sight of its political value. Naturally, the days of the ‘once great’ British motor industry have changed immeasurably in the past thirty years and while it remains a ‘cash cow’ to HM Government, it not only draws heavily on various governmental subsidies but has also become the bane of many consumers’ lives.
If you trawl back through some of the motoring features written when ‘B-C-ing-U’ was just starting, you will turn up a story about the industry’s ‘Smoke and Mirrors’ aspects, which has led to this update.
Put into perspective, there are very few of us that can live without our personal modes of transport, whether supplied by a company, employer, or funded privately. Today’s UK car parc stands (well, at the end of 2014) at a remarkable 32,610,323 cars (not vans, trucks or buses) that are spread fairly typically across the nation’s main population centres, which means almost 10m of them are in the ‘prosperous’ and increasingly French south-east, with just over 3m in the ‘traveller’s nightmare’ of the south-west. The north-west of England apparently needs just over 3m of them, with the West Midlands boasting around 100,000 more, while the East Midlands requires a mere 2.3m and Yorkshire/Humberside 2.4m. East Anglia, Wales and the north-east require around 1.5m in each region, while Scotland manages with just over 2.5m and Northern Ireland makes do with just over 1m. There are no surprises for such a spread.
From an industry that used to be referred to as ‘world-beating’, the three Japanese carmakers (Honda – has never demanded government support, Toyota – would not be in the UK without government support and Nissan – which never ceases to demand government support), allied to Indian-owned Jaguar/Land-Rover (invariably ‘on the prowl’) and US-funded Vauxhall, plus a selection of smaller players, manufacture no less than 1.5m new cars every year, of which around 1.2m are exported, drawing in valuable taxation and export revenues. However, our governments of the past twenty years have done little to show their real support of such an immense and large employing industry (800,000 in total, of which 160,000 are in manufacturing – SMMT sourced). In fact, their support (unless enforced by ‘threats’) has been risible, despite a commitment from the Automotive Council UK, a collaborative effort between the automotive industry and government, to pump around £1bn into the sector over the next decade.
Yet, our government shows little more than contempt to British car buyers and users. In fact, it uses us as a means to raise increasing amounts of revenue, now that it has lost much of it from former smokers and even drinkers. The most recent upwards hike of the Vehicle Excise Duty (which was known laughably as the Road Fund Licence in its former existence) will take effect from 2016 and will mean that all of the divisive attempts to make us drive ‘low polluting motorcars’ that attracted zero VED will no longer possess any merit and the vast majority of us will be enforced (thanks to an increase in number-plate recognition cameras) into paying several hundred Pounds extra each year as recompense. Instead, the push is now on to get us into Electric Vehicles (EVs) that create even greater pollution from our ‘non-nuke’, fossil-fuelled power stations, yet will cause logistical nightmares, should you wish to drive much further than 80 miles before needing to be recharged (usually by trickle means), with the slow developmental cycle of the typical battery.
In the meantime, despite a voter-silencing ‘Pothole Fund’, our roads network diminishes into comprehensive denigration, adding significantly to vehicle damage, for which sorely expensive insurance premiums simply refuse to pay out. Mind you, it keeps the insurance business rolling in cash, with repair costs now hitting exorbitant rip-off levels, a factor not unnoticed by HM government, especially as it has just levied a 50% hike on the former ‘insurance tax’ that increases annual vehicle running costs to another level…and the Exchequer hopes that we will not notice.
However, in a display of the grandest mindlessness, it seems that we are spending (‘investing’ is not a true description for fast-depreciating ‘assets’, which ought to be called ‘deficits’ by default) increasingly more available funds on 4x4s. Falling into the market-leading descriptions of SUV (Sport Utility Vehicle) and Crossover (pseudo 4×4) models, this sector has almost doubled in size in just the past decade, the ludicrousness of which has not passed me by, when you consider the abysmal state of the nation’s economy in that very dark period of 2007-2010…one that remains surprisingly chasm-like, if you avoid star or belly button-gazing and contemplate the immense amount of UK consumer debt, which is nudging the £4tr mark.
How anyone can think that a vehicle driving all four wheels can be more frugal, less costly and more practical to live with, over its two-wheel-drive alternative, is beyond my comprehension. However, the foolishness of fashion and the ready-accessibility to play with other people’s money have become the premise of the past three years at least. It was a key senior executive at Ford Motor Company, who informed me in a relaxed moment that his company earned more from selling used than new cars. Yet, the motor industry has been ‘selling’ heavily subsidised lease programmes to car buyers, which mean that they hardly have to touch their hard-earned savings, in what appears to be an exercise of tremendous generosity that could fold in a crushingly damaging manner in a trice, should the rug be pulled from beneath the industry’s frequently shaky feet. It should also be highlighted that business car sales (by which the end-user makes some form of extra taxation payment to government, or needs to claim against HMRC) are currently running at close to 92% of the total of what is expected to be 2.6m new cars being registered this year alone.
Perhaps one of the most amusing car names that I have heard of in many years might have some effect, although I doubt it, as it emerges from the halls of Subaru (a 4WD exponent), a brand that possesses only a very limited engagement with the UK new car market. Anyway, its latest offering is known as Levorg, which, if read carefully in a rear-view mirror, comes out as ‘grovel’, which happens to be an enticing way for one carmaker to attempt to grab some extra business. Mind you, at least it is not as zany as some model names, which include Honda’s Vamos Hobio Traveldog, Isuzu’s Mysterious Utility Wizard, Nissan’s Pantry Boy Supreme and Mazda’s Bongo Friendee.
On the true but cautious front is the latest Jaguar XE, which is little more than an overpriced and shrunk-in-the-wash version of the XF. Following (a key word here) the Teutonic fascination for replicating its models in increasingly smaller jelly moulds, all new Jags seem to miss the point about ‘British innovation’, a factor that lies behind the Indian Tata Corporation’s on-going investment programme but that should incorporate design and technology too, aspects at which JLR’s European rivals are most adept. Instead, rumours emanating from the West Midlands seem to hint at excessive waste of resources, notably because they are not their own, and a consummate lack of innovation. After all, how can the full-size, slow-selling (upwards of £10k discounts at your local Jag dealership) XJ luxury car survive in a sector, where executive cabin space is the prerequisite (Merc S-Class, Audi A8 and BMW 7-Series being prime examples, all of which are significantly more spacious than the slim-line Jag)?
The days of the hot hatchback may be reaching their nadir very soon too. From a market segment, not so long ago, to which 150bhp meant zesty motoring, only double that number seems to be the expected norm these days, otherwise it does not qualify as ‘hot’. Yet, with runaway potency also weighs in runaway price-tags, the very antithesis of what hot-hatchery purported to be all about. In addition, the (sadly) Germanic means of wresting even more funds from cash-strapped car buyers, by presenting a motorcar that needs to be personalised, or customised, is now intrinsic to ALL car brands. However, the consumer is gulled into believing that the addition of 50% to the invoice bottom-line is eminently acceptable to making that vehicle ‘just what the doctor ordered’, even though most of the gizmos and add-ons are worth next to nothing the instant the car salesperson hands over the keys and ushers you off the forecourt, as his next victim arrives for a test drive!
Perhaps the ultimate rip-off lies in car paint. It would appear that an average fee is now charged above the much-vaunted ‘poster-boy’ images and their attention-grabbing sticker prices. That figure is around £500, with double and significantly more being charged on pricier and classier models. If you tick the options box for ‘pearlescent’, or ‘mica’, £3,000 to £4,000 on-cost will result assuredly. Me and my next car? Sure. Supply it without paint, thanks. I can survive on primer.
Is there an end to this madness? Maybe. However, the emotional nature of car acquisition is still stridently evident. Look, I am not seeking a Corbyn-esque utopia of everyone driving utility transport (while he gets chauffeured in a bulletproof-glazed luxo-barge) but I do feel that a sense of reality that should have been hammered in around the time of the ‘economic crash’ needs to be instilled at some juncture. New car prices are runaway rampant. Running costs are exorbitant. Snob value is at a peak. There will be a tumble. When? I am unsure but the mighty do have a tendency to fall. The bottom-line is that, when you take a slightly askew view of a business that you love dearly, some of its more ludicrous aspects can and do hove into focus.