Samstag, 28. Februar 2009

Europe's Car Industry

The first step was all sorts of subsidies for car buyers (including the incredibly wasteful incentive to scrap perfectly good 9 year old cars, many of which only slightly more polluting and with slightly worse mileage than the news ones intended to replace them).

Now, a couple of billion Euros of "guarantees" or "government participation" or "research funding" or whatever it takes to save Opel. For now.

Doesn't anybody want to see that regardless of the curent crisis there is huge overcapacity in the European car industry, and something's got to give sooner or later?

If/when the current crisis is over and the world economy picks up, there's little doubt that the oil price will start skyrocketing again.

Eventually, people will have to reorganize their lives in ways that require less driving. Fewer and fewer big cars will find buyer. And eventually, fewer and fewer cars will find buyers.

Wouldn't it make sense to start industry-downsizing now, at a time when people are voluntarily reducing their car purchases, instead of pouring billions and billions of subsidies into what is essentially a sunset industry?

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