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23 April 2024

European automakers set to leave Americans in the dust

By Martin Baker

Products don't get much more "premium" than the Jaguar car. I recently alluded to the negotiations between Tata and the British government, and the temptation to look after one's home base first and last (a very American trait called protectionism, if taken to an extreme).

Well, the dealing is still going on behind the scenes, and we await conclusive developments.

Meanwhile, there are some startling sales figures emerging from the motor manufacturing sector. Sales of Rolls-Royce cars – one of the few products definitely more upmarket than a Jaguar – actually rose to 1,212 in 2008 from 1,010 in 2007, according to recent figures from German owners BMW.

BMW, which also owns another iconic, formerly British brand, the Mini, says this car too had a strong 2008, with sales of 232,425, up 4.3 per cent from the previous year.

But it seems that consumers just about everywhere were getting nervy last month. BMW describes December as a month of "consumer reticence". Across the entire BMW group sales were down 26.4 per cent compared to December 2007.

But at least BMW is reasonably well prepared to face the difficult times ahead. Compared to the plight of General Motors, Chrysler and Ford, the German motor industry looks to be in robust health.

US voters were angry about the bailout of the banks (less so about the availability of the cheap credit they consumed so readily) and tend to have more sympathy with workers who shower after they've finished work, rather than those who clean up beforehand. Nevertheless, here's a prediction I didn't make earlier, but I do now: At least one of the big three US car manufacturers will be allowed to go to the wall.

I back Chrysler and Ford to limp through, but I fear General Motors won't make the cuts and the corporate re-design necessary to survive 2009. You read it here first.