8 January, 2009
Chris Dillow has been digging around in the National Statistics and found a pretty convincing reason why there are so few new cars being sold at the moment. The car makers aren’t reducing their prices unlike lots of other businesses and retailers so their products are sitting on the shelf as people are opting to by second hand cars whose price has been falling.
This of course hasn’t stopped those with a vested interest asking the taxpayer for a bailout. There is a serious argument that the car industry is capital intensive with steep barriers to entry so once it’s gone, it’s gone and it’s not like another shop springing up in a vacant space left by one that has closed. That’s an argument I have some sympathy with but it’s not unreasonable for the government to point out that the car industry should reduce its profit margins and sign up to produce safer, greener and better value cars in the future in return for government assistance.
On another note it staggers me how addicted we are to the car in this country no matter what the cost. I found this article on the Independent which details the risks from legal and illegal drugs and the numbers of deaths in 2004. The number of deaths from illegal drugs under 1500. The number of deaths caused by vehicles over 3,000. So remember kids just say NO particularly to people trying to sell you a car.