The most alarming thing about Honda’s decision to shut down production in the UK isn’t the length of the layoff (although at four months that’s bad enough) but that, when work resumes in June, the target will be 120,000 cars a year not the 240,000 it made last year.
This may well be because of the huge amount of inventory to be sold off (car makers have been surprisingly reluctant in the recession to really take the knife to prices to shift unsold stock) but it may also indicate that the big car makers think the new car market will be smaller well into the future.
There’s no real economic reason for anyone to buy a new car as the first year depreciation is so huge (although clearly you need some new ones to create a used market).
And modern ones go on for ever, certainly by the standards of 20 years ago, so you only really need to change every ten years or so.
The big hope for the industry is that people will replace their emissions-leaking old models with a new greener version, and that’s something that Honda has pioneered. But when times are tough the emissions take the strain.
So it’s a grim outlook and the car makers may have to face the reality that many people, apart from devoted petrol heads, have woken up to the fact that their car is just a utility rather than some kind of lifestyle statement, the reason why companies like BMW have performed so spectacularly until recently.
But if eco-friendly (albeit rather boring Honda) can’t shift the things, what hope is there for Tata’s mostly lifestyle brands Jaguar and Land Rover?