UK car industry begging for help
Despite the announcement of the government’s UK car scrappage allowance the UK car industry is still looking at a very difficult short to medium term outlook. Aside from the fact that car sales in the UK have collapsed over the last 12 to 18 months there is significant concern that many car sales are funded by credit and finance available to UK consumers is still relatively expensive.
Even though we are starting to see signs of liquidity return to the financial markets there are significant concerns that many UK consumers will be looking to “get their house in order” before looking towards buying another vehicle. Whether this potential delay in replacing their car lasts six weeks, six months or a year it will have a significant impact on liquidity and cash flow in the industry. Many people believe that the car scrappage allowance is too little too late and if the government had reacted positively to a request last year for financial assistance we may not be in this mess.
As a consequence, we could see tens of thousands of jobs lost as a result of the downturn in the UK car industry which could severely dent Labour’s bid to regain power in the run up to the next general election.
