The government’s bailout package hasn’t
gone far enough. Providing funding for loss-making manufacturers
will not help – the only thing that will help them is if people
start buying cars and vans. Just lending money to fund losses only
stores up the problem.
If the government could get together with
manufacturers and start offering incentives, that is what would get
sales moving and would help manufacturers and suppliers.
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Currently, manufacturers have fields full of unsold
cars which are depreciating by the day – if consumers could be
given an incentive to buy them, this would turn the stock into cash
and, at the moment, cash is king.
Manufacturers need to be transparent about their
pricing policy, in order to restore consumer confidence, and
incentives need to be offered, so people buy now rather than
wait.
If the government were to exercise its influence
over those banks in which it has taken an investment, it could
encourage them to come up with personal finance arrangements for
consumers, to help them finance cars – although this would require
joined-up thinking, something that the government has promised in
the past but not necessarily delivered.
The author is a partner of Begbies
Traynor
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