Whatever else is happening in the world, and let’s face it there is plenty at the moment, a decision by the FCA to ban interest linked commissions on finance agreements will have serious ramifications. The Financial Times reports that it will save consumers £165 million a year, or you could look at it another way – it will cost the motor industry a similar amount. You cannot fault their logic, if a sales executive is rewarded for selling higher interest products, interest payments are likely to go up. Combine this with their very wide ranging investigation into Lookers and you see that this is an industry under fire. Falling sales, a rapidly changing market and a complicated economy are bad news, losing one of the few areas of profitability won’t make it easier.
Electric vehicles have not had it easy either. They are in the news for a number of reasons. The market in China has dropped by 34%, for instance, which shows how vulnerable such sales are to falls in subsidies. Maybe this is why James Dyson decided to pull the plug on his own electric car project, because making such vehicles is definitely not easy. As Harley-Davidson has also found out this week, (though an electric Hog just doesn’t sound quite right, does it?) as they had to halt production after finding a serious glitch.
Two French manufacturers have been making headlines too. In an interview with Citroen U.K.’s MD, Karl Howkins, it was suggested that the danger of recession could cause sales figures to drop by as much as 25%. Something which would definitely put their dealers at risk. At the same time Renault UK said it is considering a restructure of its network, not to reduce it but to make it more efficient with a hub and spoke structure. No doubt if apocalyptic predictions for the car industry come true over the next year they will be much restructuring anyway, not least from casualties, as 2020 promises to be a difficult start to the new decade.
Have a great weekend, not much going on so you might as well watch the rugby. Come on the northern hemisphere!
That’s the way things come clear. All of a sudden. And then you realize how obvious they’ve been all along.
Madeleine L’Engle (1918 – ), The Arm of the Starfish, 1965
Be a good listener. Your ears will never get you in trouble.
However beautiful the strategy, you should occasionally look at the results.
Sir Winston Churchill (1874 – 1965)
I have the consolation of having added nothing to my private fortune during my public service, and of retiring with hands clean as they are empty.
Thomas Jefferson (1743 – 1826), letter to Count Diodati, 1807
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