Have you noticed that the Big Screen TV has halved in price in 18 months? The washing machine, fridge, freezer, PC etc have all come down dramatically over the years.
Cars - they keep getting dearer - but for how long. Currently it seems a fairly cosy club - all the big players are in competition but when one raises their prices, the others follow along soon after.
Article I read recently said that these days are numbered:-
1) Environmental cases against big cars with big engines (and the big profits)
2) New competition coming within 5-10 years from the east - East Europe, South Asia, South East Asia and China
3) Existing big European suppliers caught - Mercedes, BMW aiming for up market segment with bigger cars, Mass market suppliers(Ford, Peugeot) market attacked from above and below from new emerging suppliers from below as well as existing competitors with new brands (GM has Daewoo / Chevrolet, Renault has Dacia/Logan, Toyota has Daihatsu)
If the market in 5-15 years time is filled with Chinese, Indian...........where is the future for Peugeot?
If the Upmarket segment of MB& BMW is attacked by Lexus, Infiniti............... will they compete as currently they sell on badge and lack the engineering quality of the Lexus
Who will be the winners and big names - may be the future is Cheaper, smaller, simpler, easier to fix cars and not the all singing and dancing electronics in the current car choice.
EG Royal Enfield Motorcycles (used to be UK) now built in India - old technology can be fixed as compared say a new Honda bike which requires sophisticated workshop to diagnose and repair faults. Would the same apply to cars?
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No, we need all the fancy electronics in order for the engines to run efficiently, all engines must confirm to Euro 3 standard I think (maybe 4 now) so we need all these complex sensors.
A Morris A series engine would never be allowed to be on the market today.
Also the far east are still way behind European standards, they will never be able to fully catch up.
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>Also the far east are still way behind European standards, they will never be able to fully catch up......
Ostriches and head in the sand come immediately to mind. Hang on to your rattle and take control of the remains of British industry perhaps?
:-)
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pmh (was peter)
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All the car manufactures are making a fortune out of us just like the banks and oil companies , roll on the £100 Ford !
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Ford USA aren't making any money at all. They actually make more money financing the sales of their cars than by actually shifting the metal and they had horrendous losses last year. Re electronics, I can remember when 'memory cards, were £1 a megabyte - I have just bought a 4 gigbyte USB plug in thingy for £22!
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I do think the cost of add-on electronic items, especially sat nav, is ridiculous. It can typically be around £1500 to £2000 for something that not much more complicated than a portable DVD player.
I guess the manufacturers do their sums and would rather make £1000+ on the few they sell, than £100 if the bombed the price.
I real terms, though, surely cars are much cheaper now, and you get a lot more? We just bought a Colt CZ1 5dr with a/c for £7500. That's £500 cheaper than the Seat Ibiza 1.2S we bought 2.5 yrs ago. In 1991 we bought a Peugeot 106 XS and that was £7000.
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My grasp of economics probably isn't the best, but as I understand it:
A lot of white goods prices are low now because of very cheap manufacture (China, etc) and cheap transport.
The reducing price of new style products is down to recovery of developement costs.
Cars in the UK are priced to what the market will stand, and the manufacturer won't miss a trick to sell you extras with a huge mark up, or charge an arm and several legs for spare parts - ECU anyone?
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Ford USA aren't making any money at all. They actually make more money financing the sales of their cars than by actually shifting the metal and they had horrendous losses last year.
I work for a large multi-national technology company and as the days go by it becomes clearer that it is getting hard to make money from hardware and to a lesser degree some of the software that goes with it. The consensus is that the only profitable area left is professional services such as consultancy, outsourcing, maintenance etc. I think the car companies are in the same boat, ie making cars is labour intensive, and to some degree the market porice for these cars cannot be greater than a certain level. Also, if you work for companies like mine, you begin to realise how vast the overheads actually are (ie salaries, buildings, sales expenses, pensions, other benefits, redundancy payments etc etc) and the alarming level of mark-up you need on your hardware/cars just to not make a loss.
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Also the far east are still way behind European standards, they will never be able to fully catch up.
Cough, splutter, i suppose these Hondas and Datsuns will never catch on eh?
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There is a fundamental problem in the OP's question
Cars are not continuously going up in price.
In relative terms they are coming down every year.
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TourVanMan TM < Ex RF >
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There is a fundamental problem in the OP's question Cars are not continuously going up in price. In relative terms they are coming down every year.
I agree, and it's a similar story with electronics. A good PC system still costs around £1000, just like it did when I bought my 486 when it came out. It's just that now you get a lot more for your money.
Same with cars, if you wanted a car with electric windows, cruise control, top speed of 120mph, airconditioning, alloy wheels 15 years ago you'd have been paying £20k+. Now you can probably get all those things for less than £12k
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A good PC system still costs around £1000, just like it did when I bought my 486 when it came out. It's just that now you get a lot more for your money.
You must be relatively young - PC's were about £5-6K when they first came out. My first home desktop PC was £2.5K, and even the 6?yr old one that sits unused on my desk now (P3-800) cost £1500.
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>> A good PC system still costs around £1000, just like it did when I bought my 486 when it came out. It's just that now you get a lot more for your money. >> You must be relatively young
You've made my day!
36 now, bought my first PC when I was university (having sold a car to pay for it!) so that would have been 15 years ago. I was lording it up over my friends with their 386s!
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I wasn't really meaning the japs.
Anyway Honda are very successful today partly because of the Rover influence. They learnt a lot about how to market cars in the west from them.
Datsuns are Nissian, which is now owned by Renault anyway.
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I agree that the price of 'option' sat-nav is stupid. You get something inferior to TomTom for about 10x the price. And they want stupid prices for map upgrades - even though the data can only come from one of the two big mapping data companies.
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Anyway Honda are very successful today partly because of the Rover influence. They learnt a lot about how to market cars in the west from them.
LOL. Please explain before I fall off my seat.
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In the early 80's Honda made reliable but dull cars, they had no clue how to make a classy car. BL on the other hand had no idea how to make a reliable car. They both joined forced to solve each others problems.
Honda learnt the art of using certain materials to give a classy feel from Rover. If you compare the Ronda's to the Honda's of the 80's and early 90's you will find the Ronda's are lot classier.
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Tata Marina
www.theautomall.co.za/images/Tata_Marina_lrg.jpg
£4,500 new in India, would there be a market for such a car here?
The trouble is it would probably be sold with a high markup that makes it low-volume, high margin, just like the Rover Indicar, they seem to think it would upset the apple cart to sell very cheap cars here.
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Certainly prices have come down in real terms (as have other motoring costs despite the bleating of the ABD etc.) but in actual terms prices have gone up fairly steadily. I always use the benchmark of a decent sized 2 litre saloon. I remember my Dad looking at various Peugeot 504, Volvo 244, Saab 900 type cars in about 1979 and they were about £5000-5500. Over the years this sort of car has tracked upwards. Now perhaps a Volvo S60 2.0, Saab 9.3 2.0, Honda Accord 2.0 is the nearish similar and they cost about £18-19K. What is more obvious now is how much more discount u can get off certain makes eg 2.0 Mondeos for £12K new. the increase 5000 to 18/19000 sounds less than inflation. I know it equalled my Dad's civil service salary in 1979 but he's been retired since 1990 so no idea what he would be on now...maybe £25/26K....so the car is cheaper relatively but more expensive absolutely.
Also remember my Gran paying £300 for a Colour TV (in a nice cabinet) with remote control (on a wire!!) in the early 1970s....imagine that is now equivalent to about £5000 in TV buying terms.
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Tata Marina www.theautomall.co.za/images/Tata_Marina_lrg.jpg £4,500 new in India, would there be a market for such a car here?
I dont think so ! Ok we are getting cost conscious, but most people who know anything about cars and are 30+ know how dire the Marina was. If you paid £2000 for a new one you woulkd be putting your money in the bin.
You may find a couple of hundred loonies in the UK who might buy one, but in marketing terms, this isnt a 'market'.
By the way in the past I have had 2 Marina's !!
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It's not a Morris Marina, it's a proper new car, it's only been out for 2 years.
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"Also the far east are still way behind European standards, they will never be able to fully catch up."
I can't believe anyone can still seriously say things like that. It sounds just like someone's famous last words, like that general who said "Why, they couldn't hit an elephant at that range!" and had his head blown off a second later.
It would be more accurate to say, the far east are way ahead of European standards, it is unlikely the west will ever be able to recover its lead.
Watch out for Indian companies buying into British firms and then modernising them.
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"Also the far east are still way behind European standards, they will never be able to fully catch up."
May be true if you exclude China. I bought a copy of that World of Cars 2007 catalogue, and was amazed at the output from the Chinese car industry, having been oblivious to it before. They already build most of the rest of the worlds car models under joint venture agreements. Just flicking through, cant be bothered to list all of them, theres: Beijing Hyundai, Beijing Chrysler, Beijing Mitsubishi, Changan Ford, Dongfeng Citroen, Dongfeng Honda, Faw Audi, Guangzhou Toyota, Huachen BMW, Nanjing Fiat, Shanghai Chevrolet, Shanghai VW, and Zhengzhou Nissan, etc., etc.
Looks like they have got all the current technology they need at their fingertips.
Sounds like you may be able to buy a Chinese Rover 75 hybrid, (if you are that way inclined!) over here in the next few years. This report says available 2007, but I've seen another which says available in Europe in 2009:
www.autoexpress.co.uk/news/autoexpressnews/204091/...l
In 2004 China was number 4 in annual production volume, behind Germany, USA, Japan. Like it or lump it, how long will it take them to get to number 1?
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