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State solutionneeded toglobal meltdown

By unknown | Apr 15, 2009 | COMMENTS [ 0 ]

Phuti Mpyane

Phuti Mpyane

Over the past few months, readers of this section will have grasped the nature of the topics, the intention of the articles and the direction. The automotive industry is a global giant with plenty of aspects and a far reach.

Even this week, fresh from an overdose of marshmallow and chocolate, the struggle to inform you about where you can find a sweet deal on a car, be it new or pre-owned, continues.

I have also touched on the global financial downturn here and there and have, after a run-in with a reader who complained about the constant broadcast of this crisis, resorted to never mentioning it again.

Today I beg for permission to unearth it as I seek to throw light on a different subject matter, which is you, the car buyer.

By now every adult should be aware of the problems affecting the big economies of the world.

It has been fodder for newspapers for a good number of months now and some movement has been recorded. The Obama administration has come up with bail money for its big three motor vehicle manufacturers - Ford, General Motors and Chrysler.

Has this made the companies financially viable? I don't think so, though what has been achieved is some form of relief in terms of retaining jobs and securing employee benefits.

This is a perfect recipe that suits the United States, which includes its fuel crisis.

Europe has its unique problems with the economic freeze. It will also require a solution that will suit it best.

Locally there's been an approach to the government by car manufacturers in search of financial aid and, although many have lamented the difficulty of business viability, none has ever cried foul about how the effects of this economic slump affect consumers.

Historically, the amounts asked for cars in this country have been shatteringly high and the recent, monthly increases in local car prices is not helping the case of the already heavily burdened consumer who, regardless of whether the manufacturer survives or not, still requires transportation. Shouldn't the nation also approach the powers-that-be for a bail-out?

A colleague of mine threw in his two-cents worth in finding solutions, in particular a South African way out.

Imagine a government intervention that leaves manufacturers to keep doing what they do best, which is producing cars. But instead of giving money to the ailing companies, the government instead uses that money to buy the cars from the makers and sells them to the public at very affordable prices.

This will be a case of hitting two birds, or many birds, with one stone as the need to keep manufacturing will be intact, thereby securing the future of these companies.

You think about it and decide. In some cases, manufacturers have taken the consumer into consideration. General Motors of SA has recently decided to decrease the price of the Opel range. In the words of a company spokesperson, "this new development is really about the price increases.

"We don't think we can pass on to the public up to a 35percent price increase on an Opel Astra.

"This will include the Opel Meriva, Zafira and Tigra."


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