Big car companies in trouble?

[Pan Pan Pan]

It seems a number of significant car manufacturers including VW, Nissan, Tesla, and some Chinese brands, are having trouble shifting cars.
What do people think might be the reasons behind this?
Are people just turning away from cars in general, or could there be other reasons why major manufactures have started struggling?

[Richard-390a0]

Do we need another thread so soon after the one started on Wednesday?

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[Pan Pan Pan]

Richard-390a0 said:

Do we need another thread so soon after the one started on Wednesday?

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Yes we do, unless the original post does not encompass ALL the significant car manufacturers who are closing plants. laying off workers, and cutting back production on the plants that are still running.

[TownIdiot]

One of the reasons has to the sticker price of new cars.

I walk past a small Kia dealership when I go to the station.
There's a new car on their forecourt priced at £69800.

It might be really good but one thing's for certain - that's seriously expensive.

[Debaser]

I think there's a few reasons.

Legislation requires safety systems to be turned on every time the car is started, and these systems have to be annoying to turn off. Modern cars are annoying to live with. Some of my friends who have zero interest in cars and never talk about them, have started telling me they hate these safety features. They regret buying a new car, and have started suggesting others avoid getting one.

Perhaps linked to safety legislation, manufacturers aren't selling as many small cars. A friend used to buy a new Fiesta every few years. Now she can't, so she's hanging onto her current one.

Lots of people are reluctant to get an electric or plug-in hybrid vehicle. If you have no interest in cars, and simply want to replace your current ICE vehicle with a new version, there isn't as much choice.


Manufacturers are trying to sell cars people don't want to buy. I can't see that being a good long term plan.

[Panamax]

1. China and the Far East
2. Tesla
3. Game over

Some may recall Boris Johnson in October 2021 assuring the nation that UK would become a world-beating centre for electric vehicle/battery production...

"Securing or creating 440,000 well-paid jobs and unlocking £90 billion of private investment by 2030 towards transforming the nation into a low-carbon economy.

"Around £620 million for targeted electric vehicle grants and infrastructure.

"Some £350 million to boost the electric vehicle supply chain, for example by encouraging manufacturers to specialise in this area."

[Cambs_Stuart]

Cars are more expensive than they used to be, and interest rates are higher. Wages haven't kept up so people are holding onto cars for longer. Plus a lot of modern electric and hybrid cars are depreciating like a stone.

[Jimjimhim]

Richard-390a0 said:

Do we need another thread so soon after the one started on Wednesday?

https://www.pistonheads.com/gassing/topic.asp?h=0&...

There are only so many things to chat about, hence the repeat of similar threads.

[Robertb]

Pan Pan Pan said:

It seems a number of significant car manufacturers including VW, Nissan, Tesla, and some Chinese brands, are having trouble shifting cars.
What do people think might be the reasons behind this?
Are people just turning away from cars in general, or could there be other reasons why major manufactures have started struggling?

Because modern cars are all dismal-looking, relatively expensive, full of complex and irritating 'safety' systems and generally not very good.

I honestly cannot think of a single new car on sale, excluding the realms of sports/supercars, which I'd spend the asking price on (either in cash or at todays elevated finance rates)

[Countdown]

Both me and my wife are doing far far less mileage due to WFH so it's unlikely we'll be replacing our current cars any time soon.

[vikingaero]

Covid affected supply of cars, parts and components. Then energy and Ukraine both contributed to ramping up car prices to mental levels and no company is willing to reduce the RRP (although the transactional price might be different).

Add to cheap money disappearing and interest rates on mortgages - if you had a mortgage in 2021/22 it would have nearly doubled.

[MitchT]

Unavoidable living costs (housing, fuel, food, etc.) have gone up much more than wages so there's less left with which to finance a new car. Also, new car prices have gone through the roof which has not only hit affordability badly but also dragged a lot of very mundane cars into the additonal VED rate meant for luxury vehicles, whch means what was a throw-away annual expense is now a big chunk of money. Also, as others have said, more working from home means less wear and tear on your existing car so it'll last longer. Buying a new car just doesn't add up for many people.

Edited by MitchT on Friday 8th November 12:51

[Nomme de Plum]

Pan Pan Pan said:

It seems a number of significant car manufacturers including VW, Nissan, Tesla, and some Chinese brands, are having trouble shifting cars.
What do people think might be the reasons behind this?
Are people just turning away from cars in general, or could there be other reasons why major manufactures have started struggling?

We have purchased 1,658,382 new cars to date in 2024 up 3.3% from 2023 and 144,000 in October alone so still on track for a little under 2M new cars. Considering the high interest rates this doesn't seem too bad to me.

Isn't it likely that modern manufacturing techniques along with less complexity and fewer components in an EV that less employees will be required?

Working from home is the norm for many now or even hybrid working along with grocery and other deliveries means the need for a car gets reduced or the one we currently own can last longer.

So basically it's just change like has always been the case across numerous industries and lifestyles.

Edited by Nomme de Plum on Friday 8th November 12:54

[wibble cb]

Countdown said:

Both me and my wife are doing far far less mileage due to WFH so it's unlikely we'll be replacing our current cars any time soon.

This is a major part of it. We swapped out our 12 year old VW Golf , couldn’t justify spending on a fancy EV for the miles we now do, so ended up spending about half the cost on a 3 year old ….VW Golf, yes it’s got some stuff the old one didn’t, but it’s getting more difficult to buy a car we’d like as opposed to what’s available.

[rpguk]

Yup, new cars are expensive and don't seem to have the big margin for discount from the sticker price that used to be common. Add to that insurance is expensive so your monthly cost has another chunk on top. On the other end people are feeling the pinch - even if they've got a job they might have a remortgage coming up at a higher interest rate and adding a 48 month financing commitment isn't going to help there.

You've then got the fact that cars from a few years ago are good so why pay a fortune to change when what you've got works OK. It's surprising just how fresh a 10 year old car can look.

[Nomme de Plum]

Robertb said:

Because modern cars are all dismal-looking, relatively expensive, full of complex and irritating 'safety' systems and generally not very good.

I honestly cannot think of a single new car on sale, excluding the realms of sports/supercars, which I'd spend the asking price on (either in cash or at todays elevated finance rates)

If i consider the people in my local vicinity and members of my social group they are with a very few exceptions not remotely interested in cars and drive all manner of boring looking vehicles and nearly all used except where company provided.

None of the things that seem to upset certain PH posters have zero impact on their choice of car.

[FMOB]

[quote=Debaser]Legislation requires safety systems to be turned on every time the car is started, and these systems have to be annoying to turn off. Modern cars are annoying to live with. Some of my friends who have zero interest in cars and never talk about them, have started telling me they hate these safety features. They regret buying a new car, and have started suggesting others avoid getting one.
/quote]

This, modern cars have become a pain to live with. Rather than being an easy solution with a small maintenance headache they have become an annoying solution with a bigger maintenance headache.

[Zed Ed]

Typically buy my cars outright and keep for 5-8 years, so rapid rises in list prices are front and centre in any decision to buy a new car. And trading perfectly serviceable older cars for the new version becomes a less easily justified decision, so I’ve put off changing.

Vehicle security is frankly annoying and is putting me off buying a new car. Cars are parked on the street in North London and car crime is very visible; so I need complete clarity on general theft risk and on how good or bad security is on a given model, so I can avoid particular vehicles entirely or add additional immobilisers etc. Complicates the buying decision significantly.

Insurance; rising premiums generally and significantly higher list prices and insurance groupings on new versions of what we currently have, adds further to purchasing apathy.

Electrics and hybrids. Yes the products are attractive but what about when it is 8 years old. Range reduction, cost to change battery, understanding of used market valuations, manufacturer support; too many unknowns and all the today issues such as availability of chargers etc.

I’m guessing a lot of manufactures are carrying significant inventory and / or seeing sluggish sales at inflated price points. But also seemingly some keen deals and discounting available. I’m guessing developing EVs isn’t cheap.

[Robertb]

Nomme de Plum said:

Pan Pan Pan said:

It seems a number of significant car manufacturers including VW, Nissan, Tesla, and some Chinese brands, are having trouble shifting cars.
What do people think might be the reasons behind this?
Are people just turning away from cars in general, or could there be other reasons why major manufactures have started struggling?

We have purchased 1,658,382 new cars to date in 2024 up 3.3% from 2023 and 144,000 in October alone so still on track for a little under 2M new cars. Considering the high interest rates this doesn't seem too bad to me.

Isn't it likely that modern manufacturing techniques along with less complexity and fewer components in an EV that less employees will be required?

Working from home is the norm for many now or even hybrid working along with grocery and other deliveries means the need for a car gets reduced or the one we currently own can last longer.

So basically it's just change like has always been the case across numerous industries and lifestyles.

Edited by Nomme de Plum on Friday 8th November 12:54

Auto Trader yesterday said that new car retail volumes were down 10% in H1 on already depressed volumes. In contrast, used cars are selling so quickly they have taken a hit on ad revenues.

[SqueakyClean]

This is an area I've been looking at in detail recently and it seems that there are multiple challenges facing UK car dealerships currently, many of them driven by the Zero Emissions Mandate meaning that OEMs are being forced to sell (or at least register) full on EVs, that essentially people don't want to buy.

On top of that you have increasing safety standards meaning OEMs are forced to include expensive tech that the regulators (and no one else) wants in the vehicles and customers have to pay for.

Then you have cheaper and competitive Chinese brands, such as BYD and MG entering the market, further pushing down the margins achievable on the traditional established brands.

Finally a significant factor in the used car market is the c.3m new car sales that were lost, never to be recovered, during the Covid period of disrupted supply chains and semi-conductor shortages, this has a knock on effect on aftersales (servicing, maintenance) income.

And only in this last week, the next consumer rights issue around disclosure of finance commissions has reared its head and is already impacting Q4 sales, with potential penalties coming down the chute.