Scrappage incentives revive demand

Car sales rose in several big European and Asian markets last month, lifted largely by government scrappage incentive schemes aimed at reviving consumer demand.

The numbers give weight to the notion that stimulus measures are pulling the global motor industry out of its deep downturn, but carmakers and industry analysts warn that sales could fall again when they expire.

Scrapping bonuses, which encourage consumers to trade in old cars for new ones, lifted vehicle sales in Spain, France and South Korea in June. In the UK, May figures showed that car sales were their ‘least negative’ since May last year. (Financial Times: July 2).

US car sales continue to decline

US vehicle sales dropped in June, but there were signs of stabilisation as Ford saw its smallest fall in a year.

Ford, the only one of the so-called ‘Big Three’ carmakers not to have gone bankrupt, had the smallest drop, with sales down 10.7 per cent from a year earlier. General Motors said sales fell 33.6 per cent, while Chrysler sales fell by 42 per cent.

The figures came as the US said it would pull financial support if GM did not get permission for a speedy exit from bankruptcy protection by July 10.

GM is seeking court permission to sell its best assets to a new company, one in which the US government will get a majority stake. It is hoping to avoid a prolonged court battle with a group of GM bondholders who have opposed the sale. (BBC.co.uk: July 1).

Ford Europe to ‘single source’ next Focus and C-Max

Ford of Europe is to ‘single source’ the redesigned next generation Focus, to be launched in 2010, from its Saarlouis plant in Germany.

The redesigned C-Max, on the same platform and also scheduled for 2010, will also be single sourced from Valencia, Spain, for all European markets and ‘potentially for markets outside Europe’.

Saarlouis currently builds the C-Max and CC (coupe-convertible) versions of the current Focus line. Valencia builds the Fiesta and Focus.

“We announced last March that Saarlouis would be the lead plant for the next-generation Focus – just as it is for the current Focus – but also we said we were looking at a possible opportunity for a second production plant for a derivative of the vehicle,” said Ford of Europe chairman and CEO John Fleming.

“Since then, we have continued to evaluate this possibility. We have however concluded that – in line with our global manufacturing strategy with its emphasis on maximising investment efficiency and utilisation of our manufacturing capacity and flexibility – we will single source the next-generation Focus from Saarlouis and single source the C-Max from Valencia. We can also confirm that Valencia will supply the needs of the European market and potentially markets outside Europe as well.” (Just-auto.com: July 2).

Tata chief confident on future of Jaguar and Land Rover

Rata Tata, chairman of the Indian conglomerate that bears his name and owns Jaguar and Land Rover, is upbeat about the marques bought from Ford 12 months ago.

Speaking at the launch of the UK brands in India, the Tata boss said: “It was a terrific decision that we took to bid for these two brands and own them.

“We are going through a downturn today that has unfortunately somewhat condemned Jaguar and Land Rover in perception, [but] that perception is very wrong.”

His comments came just days after results from Tata Motors, which included Jaguar and Land Rover for the first time, showed that India’s largest automotive maker had suffered its first loss in at least seven years.

Analysts believe that, at least in the short-term, Jaguar and Land Rover will be a millstone around the neck of Tata Motors. (Financial Times: July 2).

Jaguar Land Rover pay delay plea

Workers at Jaguar Land Rover have been asked to have their salaries delayed to help the firm’s cashflow.

The carmaker wants to push payments from the usual pay day on the 15th of the month, to the end of the month, the Works Management publication said. Staff who accept the revised salary date will get a one-off £200 payment.

Last week the firm’s owner, Tata Motors warned it may have to cut more jobs after the carmaker reported a £280 million 10-month loss.

A Jaguar Land Rover spokesman said that the organisation needed to ‘realign its pay structure’.

Works Management, a manufacturing sector publication, reported that the firm had recently negotiated extended payment terms with its suppliers – moving them from 45-day to 60-day terms.

However the 15-day extension means that supplier payments clash with salaries – prompting the change.

Jaguar Land Rover currently employs 14,500 people, having made 450 redundancies at the start of the year. (BBC.co.uk: July 2).