12 September 2011

Many of the western world’s leading economies are in meltdown; there’s still over-capacity in European car production; auto retailers, especially here in the UK, are being incentivised to ‘sell’ cars to customers that don’t exist – and yet, in the past five years, not a single global car manufacturer has gone bust.

Am I the only one who sees a contradiction here? Through a series of court protections, restructuring and reverse takeovers, companies which should have gone to the wall have survived, whether the customers want their products or not.

Of course you could argue this is a good thing – many employees have kept their jobs, communities have been saved and, in the main, suppliers have eventually been paid. Only taxpayers and shareholders have lost out.

This is just as much about politics and jobs as it is about business – and it’s not solely a western issue either, as the continuing survival of Ssangyong in Korea illustrates.

So, perhaps it’s because I’m not Swedish that I feel the decision to reject Saab’s application for court protection from bankruptcy is right (Saab are appealing). Did I feel the same way about MG-Rover? Sadly, yes; even though I live and work in the Midlands and care passionately about manufacturing industry.

The reverse takeover of Saab by sports-car minnow Spyker always looked to an outsider like a deal too far, even in these days of highly-leveraged buyouts. Saab, under GM, was a brand that had lost its USP and its customer base; it was struggling to hit 1% market share in the UK.

So, much as I admire the optimism of the Saab GB spokeswoman who declare last week that “it’s business as usual”, I’m sorry – it’s time to turn off the life support and move on. We’ve got too many car companies chasing too few customers and we need more of them to fail. Who’s next?

Rupert Saunders

Do you agree or disagree? Who do you think will fail next? Drop me a line at rupert@auto-retail.com