Tuesday, January 27, 2009

'Bail out' turns washout

Unelected Secretary of State for Business, Peter Mandelson, has this afternoon made a statement on government plans to help the car industry.

Having been
much hyped since December as a 'bail out' of the industry, following growing announcements of job losses and temporary shut downs, very little of substance has emerged.

One of the most-trailed measures was potential help for car company finance arms, to enable people who still want to buy a new car to get a loan in these times when banks are less keen to lend.

Such a plan would at least target the main problem - that demand for new cars has dropped off a cliff and car makers have stockpiles of unsold cars.

However it would not be specific help for British industry, as EU single market rules would prevent it being tied to the purchase of only British-made cars.

Yet despite the hype, all that today's statement offered was that the government was "looking at steps" on this front - a feeble response when the industry's troubles have been evident for months and action is desperately needed.

The Treasury is thought to be opposed to the idea, fearing it would set a precedent and open the floodgates to demands from other industries for the same treatment. Particularly from those within the also much-troubled electronics and furniture retail sectors.

Loan guarantees

The headline-grabbing measure, which no doubt most of the mainstream media will robotically retail, was the announcement of guarantees to 'unlock' loans of up to £1.3 billion from the European Investment Bank.

Plus a further £1 billion in loans was offered to fund non-EIB eligible investment that would be of particular benefit to Britain or to the advancement of green technology.

Responding later in the House of Commons, Mandelson's 'shadow' for the Conservatives, Ken Clarke, claimed that these loans had been announced previously and were nothing new.

Mandelson said that proposals for assistance would be considered on a "case by case" basis, and evidently seeking to slay any ghosts of the 70s he said that there would be "no operating subsidies".

Details as to the criteria by which such proposals will be judged were not given, but may emerge after a 'car summit' between government and major players in the industry, due tomorrow.

Long term fantasy

Speaking in the House of Lords, where there is no elected opposition to question him, Mandelson said that the government's proposals were designed to 'lay the foundations for a low carbon future'.

It's another example of an affliction of politicians that is becoming increasingly obvious in these troubled times. Calling it futuritis, author of the EUreferendum blog, Richard North, describes it as: "Unable to deal with the problems of the present ... they fix their eyes on some point in the future, when everything will come right. They thus ignore completely the disasters of today and tomorrow, painting their vision of distant sunlit uplands".

When it comes to the car industry, such 'low carbon future' long-termism is completely misplaced when, unless critical short term problems are relieved, there may be no car industry left.

Those problems were largely ignored by today's statement.

Thursday, January 22, 2009

Jaguar reinvents XJ220 as stunning R8 beater

Exciting news for Jaguar fans this week, as Auto Express reveals that the company is planning to reinvent the legendary XJ220.

The magazine, well-known for its new car scoops, claims a dramatic new mid-engined sports car is being developed by Jaguar as a rival to the Audi R8.

While the concept is denied by Jaguar, the magazine claims that the car will make its debut at a major international motor show within the next 18 months - indicating that plans must already be well advanced.

In a nod to the marque's iconic E-Type, the two-seater is tipped to be badged the XE, heralding a return to a more raw, sporting side of Jaguar's heritage.

But this isn't the first Jaguar concept thought to be set for the XE badge. Last year it was speculated that it would adorn a Porsche Boxster rivalling baby coupe-convertible that would sit below the XK in the range.

Plans for an R8 rival would mark another big step in the company's revival of its dated model range.

XFR breaks record

The revelation comes as the sports version of Jaguar's new XF model has smashed the company's speed record.

In a graphic demonstration of the progress made in car design and engineering since the 1990s, an uprated four-door XFR saloon hit a top speed of 225.675 mph at the Bonneville Salt Flats, going even faster than the 217.1mph record set by the XJ220.

Rumours are that the minor developments to the showroom XFR that boosted the car to the record will debut on the road as a hotter XFR S model.

With a price that will undercut the BMW M5 by nearly £6,000, the flagship XFR is set to be a tough package to beat at the top of the executive saloon sector.

Looking ahead

Jaguar had a mixed year in 2008, launching the widely-praised new XF model and seeing UK sales rise by nine percent while many other luxury car brands faced a sales slump.

But this success was overshadowed by news towards the end of the year of extended shut downs at the company's Castle Bromwich plant and job losses.

The contrast between the company's sales success and the job losses has led some to suspect another agenda at work in the minds of new owners Tata.

Gloomy forecasts for sales during 2009 may be to blame, but some are wondering whether the company's British manufacturing operations and staff have been at greater risk than assurances given at the time the Indian company took over led us to believe.

With the company's current focus on developing its new XK and XF models, as well as launching an all-new luxury XJ saloon due in 2010, the XE is not likely to be seen in the showrooms before 2012.

Tuesday, January 20, 2009

Progress in 2008 but new threats loom

If you're wondering why this blog has been so quiet for the last couple of months, it's down to a sense that 2008 offered a glimmer of hope that car users are turning the corner against overbearing politicians and repressive eco-mentalists.

Wishful thinking? Probably.
Maybe the recent drop in fuel prices and the temporary delay of road tax hikes announced back in the Pre-Budget Report has gone to our heads.

Our last posting back in October heralded the start of the debate over congestion charging in Manchester. Thankfully the plan was rejected resoundingly by almost 80% of local voters.

This was despite the best efforts of the government and its BBC supporters to bribe locals with the promise of billions of pounds of spending on public transport projects.

These were projects than Mancunians justifiably thought should be provided anyway, paid for out of the considerable taxes they have already handed over to the government - rather than the billions of pounds extra that congestion charging would have cost them.

C-charging under fire

Of all the projects dreamt up by today's politicians - who seem to regard car users as cash machines they can raid repeatedly whenever they've wasted too much money elsewhere - congestion charging took the biggest kicking of 2008.

Some months before Manchester's triumph, the archdeacon of the anti-car lobby, Ken Livingstone, was ousted as mayor of London - having threatened a completely unjustifiable £25 daily charge that would have hit a wide range of normal family car users.

Livingstone spun the plan as designed to target those dastardly 4x4s that the eco-extremists seem to have an irrational obsession about. Irrational, given most 4x4s are no bigger, nor as gas guzzling than many mid-range family cars.

Spun out of office

Trouble was, anyone who could glance at a car magazine knew that targetting just 4x4s by emissions was impossible and that far more people were going to be financially slammed by the massive increase than Ken claimed. So Ken was kicked out.

A lesson there for all politicians about the dangers of over-confidence in the ability to spin a political agenda in the face of blatantly contrary facts.

His successor, Boris Johnson, has already consulted local people and pledged to scrap the westward extended area of the London zone.

Almost 28,000 took part in the consultation, of whom 67% and 86% of businesses supported the removal of the zone - similar numbers to those opposing its introduction in the first place, but whom Livingstone simply ignored.

The zone will be shrunk to its original central area by 2010, but given current economic circumstances local businesses and people are pushing for the toll to be lifted sooner.

Anyone listening?

While locally-based congestion charging faced an overwhelming public battering in 2008 - in addition to the 1.8 million people who signed a Downing Street petition in 2007 - road pricing has not yet been driven off the government's agenda.

What is it going to take for these people to get the message?

This year the Department for Transport will press ahead with trials for a pay-as-you-drive scheme that could see car users paying £1.30 a mile at the busiest times.

The basis of the idea is to ration road space rather than provide the necessary capacity or a viable alternative - an approach which, if applied to hospitals or schools, would cause uproar.

In addition to the democratic insult of ignoring repeatedly expressed public opposition to the idea, according to the Daily Express trails have already cost £10 million and the bill is only going upwards.

Rationing roads

The government line is that the trials are designed to "inform the work of those local authorities who are considering taking forward local congestion charging".

But what council would still seriously consider such a scheme after the fate that befell policy-makers last year in London and Manchester?

Naive defenders of pay-as-you-drive - such as some long established organisations purporting to represent the interests of motorists - seem to have the idea that if such a scheme replaces road tax, or if fuel tax is reduced, then drivers could benefit.

Leaving aside, as those organisations sadly do, the privacy implications of individual movement-tracking, does anyone seriously imagine that the government would implement a system costing billions of pounds if it wasn't going to rake in more money from us in the long term than whatever taxes it replaces?

Further moves towards road pricing look set to remain the biggest policy threat to the finances of car users into 2009. But, of course, authorities both national and local are already planning many other petty annoyances to hinder and frustrate the vast majority of car users for whom there is no viable alternative to life on the road.

More about those in another post.