CAR sales in Guernsey were up last year compared with 2007, according to Guernsey Motor Trades Association chairman Mike Wager (pictured).
He said the number of new and used cars exchanging hands had gone up only slightly but it showed that Guernsey was a different proposition to many other parts of the world, which at the moment are seeing steep declines in sales.
So much so that in the USA at the moment that the government came up with rescue packages totalling approximately $17.4bn in an effort to stop Chrysler and General Motors going broke.
Mr Wager said it was difficult to say whether it was right to save the companies with cash injections but that in the case of General Motors particularly, it was likely to happen for political reasons.
‘General Motors was in a position where it was going to run out of money by the end of 2008.
‘Their costs are something like $7bn a month and there was no more cash. The argument from General Motors was that they are the biggest employer in the US and if they ran out of cash and had to let everyone go, it would cost the taxpayer a lot more through unemployment benefits and everything that goes with redundancy than to give them this rescue package.’
The cost to the taxpayer if General Motors went bust would reportedly be as much as $150bn.
‘Whether you bail out all failing companies is a difficult one, but as far as General Motors was concerned the US Government had to do it because if they didn’t they would have had to pay huge amounts out for those unemployed.’
Mr Wager said he would not be surprised to see a major car manufacturer eventually collapse in light of the recent credit crunch – and it would not necessarily be a Western firm.
‘Honda have pulled out of F1 and Toyota have reported their first capital loss ever.
‘But all motoring manufacturers across the world are suffering because the downturn in purchasing new cars just caught everyone by surprise.
‘In terms of the UK, the November market just fell through the floor.’
However, the local industry was holding up, he insisted.
‘The number of car sales in Guernsey was up only just, and not by many, but it’s been OK over here.
‘It just shows how different the Guernsey market is and what type of cars are sold and to whom. It’s predominately smaller cars and that is what other places are starting to move towards.’
He said most, if not all, local garages for the past 20 years or so have brought in new cars only as they are sold.
‘Guernsey has a small stock of vehicles. You will have a demonstrator and if someone wants a blue whatever, then you order a blue one.
‘Cars are not stockpiled here and haven’t been for a long time.’
The bail-out package for Chrysler and GM included the condition that they restructure and prove their viability to the US Treasury by 31 March.
It is also expected that when the major US car makers release results next week, they will show that sales in America for December fell to their lowest full-year level since 1992.
Article posted on 7th January, 2009 - 2.30pm
Most Commented: