[406Special]

It's not just a tough market here but global as well for new cars and
their associated manufacturers and supply chain partners. I spoke to
a former shift leader at Honda UK (Swindon) last week and he'd been
there fore 15 years, taking redundancy last January when offered the
option.

One thing he said which I find hard to believe is that a Civic costs
less than £2500 to make, including labour. As an example he said a
complete wheel (alloy) and tyre ready to offer up to the car on the
production line is less than £4.50 cost to Honda. If these costs
exclude overhead, marketing, after-sales warranty, then surely
there's still enough margin to offer cars at significantly lower
prices to get more sales. I guess another issue is whether the life
cycle of ownership will reduce to maintain/increase demand or whether
people will simply keep the car longer and lower the cost of
ownership further. Certainly the cost of ownership after purchase is
quite high, given depreciation, fuel, taxes, service and parts.

You may or not know it but the British government is offering tax
payers money to fund £1k discounts for new car sales as long as you
trade in your 10+ year old car (must have owned it more than a year
to stop people buying bangers). The manufacturers are expected to
match the £1k from the Government thus giving a total discount of
£2k. On a small car like a Citroen, Renault, Peugeot, Mazda, Toyota
or say Honda, this represents a significant saving on an average
price of £12-14k range.

I just decided to not buy a new or near new car, but rather one that
was up to 10 years old but with low-ish mileage and good service
record. Most modern cars are well built and able to be used for 150k
miles without issue as long as they are serviced properly and have
stuff like suspension bushes and shock absorbers replaced, clutches
done and normal items fixed when appropriate. I only wanted
something that could be used for trips not involving 4x4 expeditions,
Bristol days out (mostly daily grind stuff) and which was cheap to
own/run for a year or three, but also practical, but not a slug to
drive or uncomfortable. Many choices out there, but finally bought
an 8 year old Alfa 156 Sportwagon 2.4 JTD with low-wish miles for its
age (average less than 9k p.a.) with FSH and well cared for
condition. Does more than 45mpg so far, is very brisk, pretty
comfortable and has no noticeable faults or things not working. Even
has near new tyres, working climate control, fully taxed and no
scratches or history of accidents. The gutsy diesel is only 140bhp
but runs more than 310Nm of torque. Latest 159 has 210bhp and close
to 410Nm from 20v version of same engine. Plenty of fun. Even if I
lose half its value in 2 years of ownership, it will cost me about
22p per mile inclusive of depreciation, fuel, insurance, tax,
service, tyres and about 15% aside for parts. That's about a quarter
of what most people pay for average new cars over 3 years. My wife's
Saab 93 which we bought new early last year (a demo model with £5k
off list) will, over three years, cost a minimum of 40p a mile based
on 20k p.a. The higher the mileage the lower the cost of ownership.
Some higher spec cars cost north of £1 to £1.50 a mile to own due to
depreciation and high running costs.

As a consequence of the auto industry meltdown due to oversupply and
the current economic state, many second hand car prices have begun to
rise here in the UK. Good cars with low miles, FSH and high spec
which were out of reach say 2-5 years ago, represent value to anyone
wanting to buy a replacement vehicle. They are being bought at 1/2
or less of new and represent good value against the equivalent new
car of the same make/model.

Not just in the auto industry, but in the apparel industry, some of
the companies here which do design and outsource manufacturing
(usually far east and China), are suffering. One or two I know
personally, who have decent management and brand strength are down to
4 day weeks and are losing market share. It's a time for strong well
run companies with good brands, plenty of cash and flexibility to
ride the wave to better times. I think the "small is beautiful"
phrase is coming into its own, which augers well for the likes of
Bristol, Morgan, Lotus, Noble and a few others. At least Bristol
haven't expanded the range to include a large SUV or gone down size
to create a Bristol 106 or 111, heaven forbid. I think they should
do more 411 S6's and re-skin the Blenheim into something classically
beautiful and consider a more efficient and economical drive train
from say a BMW 635d as an eco/modern option. I think with that
approach they would have two year waiting list even at never more
than 3 a week!

Clyde