Why politicians are stalling real industry change

Published: 30 October 2009

Chomp, chomp. That's the sound of me eating my words. A  year ago, I was predicting the end of weaker car companies, as the full chill of the global recession made itself felt.

Ours is an industry riddled with overcapacity, I argued, and this cataclysmic slowdown in the world's auto industry would surely shake out the weaklings. Sure enough, GM and Chrysler in the US, and Opel, Vauxhall and Saab in Europe all collapsed into bankruptcy, and yet every single one of them is still here today. One or two sub-brands will be phased out, true, but there hasn't been the wholescale change many say is crucial for the survival of a competitive global business.

2009 will be remembered in the auto industry history books as the year that politicians screwed things up again. In every case, national politics have come into play and untold billions of taxpayers' money have been pumped into the sick and injured to keep them afloat. We're all familiar with the reasons why: jobs, the knock-on effect on the supply chain, national pride and political will.

Now I'm as glad as the next human being to see jobs being saved, but I worry that our industry will be left weaker as a result. Audi's board member for sales and marketing,  Peter Schwarzenbauer, told me an interesting stat this month. He forecast that 49 million cars will be built globally in 2009.

Here's the killer stat. In 2008, 59 million cars were assembled around the world. Think about that for a moment. Ten million fewer cars will be built in the space of a year. That's a hell of a lot of idle factories and workers twiddling their thumbs.

And yet not a single car manufacturer of note has been allowed to go to the wall. And I find that slightly worrying - aren't we just storing up problems for the years ahead?

By Tim Pollard

Editorial director of CAR's digital publishing arm. Motoring news magnet