29 October 2012

Turbulent is probably the best word to describe this week’s news about the economy, both in the UK and in Europe.

After our story last week about Peugeot Citroen’s bank and the impact a financial downgrade may have on the two brands and their retailer networks, it seems the French Government has decided it can’t let the group fail and has offered support in the form of 7 billion Euros of guarantees for the PSA bank.

However, analysts doubt the rescue plan will be allowed under European regulations, so leaving the business in a shaky condition.

With all this uncertainty, I can’t help but be reminded of the run up to the demise of Rover. And yet, the PSA group is working hard to improve its situation by announcing stronger links with GM Europe to help cut production costs.

But things didn’t get any better when Ford announced it would be shutting several factories across Europe including its Southampton plant that has built the Transit for the past 40 years.

This put a dampener on the news the UK economy had grown by 1% during the third quarter of the year, taking us out of recession.

There’s clearly money out there, one Land Rover executive I spoke to mid-week said the new Stratstone dealership in Mayfair sold 50 new Range Rovers at its opening event.

If my ‘man-maths’ can be trusted, that’s about £5m worth of cars.
This may be an extreme example, but there clearly are plenty of new car buyers out there. It’s just that they are being ever more choosy about which cars they buy.

However, and more significantly, this week’s news shows that while we may be out of recession at the moment, the future’s far from stable.

Tristan Young

Tags: Banque PSA, finance, GM, loans, manufacturer owned finance companies