Car manufacturers get £2billion handout.

  caccy 14:32 28 Jan 2009

Can someone clarify this please as I'm having a problem understanding the logic behind it?

Since the car manufacturers are not producing as many cars because the number of sales are down how is this (taxpayers) £2billion going to generate sales?

Now if the £2billion was given to car buyers then this would (might) generate sales.

  Cymro. 14:58 28 Jan 2009

I don`t suppose they expect the £2 billion to actually increase sales just to tide the companies over till better days come along.

  interzone55 15:00 28 Jan 2009

This is an EU loan, it's not tax-payers money (although we've backed it, so if the companies fold, we'll foot the bill).

The money is to help the companies function until things pick up, but I think it may have been better if it was directed at the car finance companies to stimulate low rate finance packages...

  canarieslover 15:01 28 Jan 2009

First it's not a handout but loans being made available. Second, there were a lot of sales lost last year where the tightening of credit meant that some people were refused finance to purchase a car. Third, its not just the car manufacturers that are affected, but all the various support industries as well, and that includes the shops local to these industries. A complete stoppage of a major industry affects many people who actually have nothing to do with that industry but who rely on customers from that industry to purchase their goods or services.

  Cymro. 15:15 28 Jan 2009

I can see your point about stimulating sales but as for giving a subsidy to the finance companies, I don`t think so somehow. It is the finance companies and their ilk that put us in this mess in the first place.

  donki 15:45 28 Jan 2009

The current outlook for a lot of people is pretty grim so trying to encourage people to get into debt by offering finance is not going to help anyone in my opinion. I can see it as a good thing thou as it keeps people in jobs, but is it not a little focased on the short term?

  caccy 16:25 28 Jan 2009

"I don`t suppose they expect the £2 billion to actually increase sales just to tide the companies over till better days come along."

So basicaly it's to pay the workers who will be producing the cars that people are not buying.
If so this is reminiscent of the book Catch 22 where "the producers of alfalfa grass got more subsidies the less they produced"

  AL47 20:45 28 Jan 2009

i think its silly, particularly here, its a dying trade here, and no amount of artificial help will save it

and i also think encouraging debt is a bad idea, like how the whole thing started

tax payers wont see this money again

its not fair to bail some people out and not othera

  interzone55 13:26 29 Jan 2009

Car manufacturing in the UK isn't a dying trade, at least it wasn't until the recession hit.

Nissan, Toyota and Honda were about the expand. Bentley & Aston Martin have been making more cars than ever before. Even Morgan have been hand-making more cars than usual.

I think the only thing that was dying off in the motor trade was UK ownership...

  Cymro. 13:50 29 Jan 2009

You say
"I think the only thing that was dying off in the motor trade was UK ownership"

That may not be such a bad thing when you consider the way some of the British owned car firms were ran in the past.

  Stuartli 14:09 29 Jan 2009

But that's exactly it - in the past.....:-))

The UK's major car production plants (Honda, Toyota, Nissan etc) exports a very, very substantial proportion of its vehicles.

These cars are built to some of the highest standards in the world (usually matching and sometimes exceeding those manufactured in Japan) by mainly British employees and management.

Behind them is a large, normally equally successful range of components suppliers.

In total it represents approximately one million workers who play a key role in the UK economy overall.

It is not the manufacturers or employees fault that economic conditions have changed so drastically over the past year or so - the industry was/is equipped and fully capable of producing the vehicles required by buyers both in the UK and abroad.

It would be a foolish government, of any hue, that ignored such a major UK industry completely.

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