This is the time to look forwards, because just as the sun rises each day, life will continue. In addition, the need for personal transport is not about to change. In life before the pandemic we knew there were serious financial issues building around the world, not least the biggest pile of debt anyone has ever known. In the midst of that, vehicles are not only subject to wide scale hypocritical abuse from ‘eco-warriors’ / ‘green energy’ lobbyists, but also have underlying debt issues related to the overall international bank driven money printing scam.
Rather than wade through this article to finds the good news, you can get it now – and then read about what is going to happen to vehicle manufacturers.
That personal transport need will mean vehicles will live longer, as the production output of new vehicles is reduced to meet demand. That means for the collision repair sector more repair work, and a cap on the rate of new technology introduction. Those new developments will not stop, but the rate at which they migrate across new vehicle introductions will slow. For our sector it’s a case of ‘heads I win, tails you (especially Government) lose’.
If this sea of change is prevented, Government need only to look across the border to Zimbabwe for the results of idiotic policy making.
Let’s step into the shoes of a vehicle manufacturer. Our main product uses energy to make it and they mainly burn fossil fuels throughout their lives. The purchase cost is significant, running ahead of the affordability of the potential customers to such an extent that to shift it, finance is pivotal. In turn we have a conundrum. After more than a century of building vehicles, most vehicle manufacturers routinely sell products which can easily achieve 200 000 km+ or more than 10 years’ service.
Yet, once a new vehicle leaves the dealer it depreciates. Why? Because the ‘experts’ say so, based on 50 years+ of un-thinking tyre kicking based ‘valuation’. Worse, insurance-based claims use the same tyre kicking data. This is a system long overdue for change, where factors to determine vehicle value are refined into line with the available data.
So, we have a safe, durable, reliable product that becomes worthless before it’s time and for a lot of different reasons increasing risk in supply of new vehicles. Around the world, especially in Europe, China and North America the vehicle manufacturers pay for thousands of acres of factory space that never – never – gets used. For the most art the assembly plants in South Africa are not like those elsewhere for one important reason – they run at or close to capacity. That’s why along with Australia, the UK and more, have factories closing but South Africa does not. It is a good place to do business.
Just when there was too much pressure….
Well fed, well paid lobbyists promote a future of pure electric vehicles and ‘green energy’. Make no mistake, this party is for those who don’t pay for anything. Consider this – in Europe we have consumer energy deals for ‘green energy’, which really comes down to which retailer buys a proportion of power generated by wind. All the power goes into a single network called the National Grid, so the electricity has no idea how it was generated before it arrives in our homes or businesses. The fact remains on the few days it is sunny in the UK, and the wind speeds are moderate, there are enough contributions from wind turbines and the modest solar installations to eliminate any power generated by fossil fuel.
Every single user has paid a tax in addition to energy taxes to allow ‘green energy’ installations to be built, and to pay those companies eye-watering rates for every kilowatt generated.
The message is apparently clear, as all good propaganda usually is. The future is electric vehicles. Well, away from international banks and accountancy companies, the answer is a pretty emphatic ‘no’ unless overall costs reduce to parity with petrol or diesel powered vehicles. However, such has been the universal promotion of this idea it is the new norm. Or at least, selected organisations want to make this idea real regardless of cost.
What should the manufacturers do?
The bottom line is most vehicle manufacturers are within one model range failure of obliteration. Some manufacturers have already had more than one flop, and the pandemic has pushed everything into a very odd place – like a lot of businesses. Before the crisis hit most were battling with deep, deep Virgin Atlantic style financial trouble.
Add to this the eco movement where vehicle manufacturers build pure electric and plug-in hybrids at a loss in order to be allowed to sell the clean, efficient internal combustion engine powered vehicles which do have a profit margin, and we can see they honestly don’t know which way to turn. Meanwhile the bail-out stars (international banks and accountancy companies) keep pushing the idea of a new world based on vehicles that they don’t pay for.
Spoiler: EVs are not going to save the planet.
Did these idiots not get the message that the rest of the world got in the early part of 2020?
The new push
Vehicle manufacturers, like any commercial organisation, will take advantage of subsidies and tax breaks, but know full well that like any business, once the music stops there is no one left in the room. For this reason, the axe has already started to fall on new vehicle programmes, regardless of how close to production they are. Fuel cell Mercedes-Benz? Cancelled. Kind-of-green plug-in hybrids? Full steam ahead. EVs? Yes, but only where Governments make it impossible to sell conventional powered vehicles without also selling a few EVs. Oh, and very few new pure EV models, since apart from what is in the pipe-like (Volkswagen MEB platform, for example) the sector is pretty well covered and can by endlessly updated to take advantage of the snail’s pace developments in battery technology.
Production capacity will finally be cut, after more than four decades of overcapacity. Most plants in South Africa will survive as long as the Government don’t mess up. Time to go easy on precious social justice-based ideas – income or philosophy? Most prefer income with a modest side order of philosophy.
The upshot is to slim down new vehicle supply to match the market, and that means for most making their older vehicles last longer. The new business model is closer to New Zealand or Cuba than ever before.
As said earlier, that’s very good for repairers!
Auto Industry Consulting is an independent provider of technical information to the global collision repair industry via EziMethods, our online collision repair methods system. For more information please visit the website: www. ezimethods.com
By Andrew Marsh