Tony Lewin, Automotive News Europe, 19th November, 2008
LONDON — The recent substantial cuts in interest rates may not be enough to help the auto industry out of its slump, said Jaguar Land Rover’s new CEO.
In an interview with Automotive News Europe, David Smith said governments needed to decide quickly about future vehicle taxation rules so that customers could regain the confidence to buy new cars and automakers could begin to plan ahead again.
“There are three things,” Smith told ANE. “Firstly, there’s a confidence issue. People are looking at their household budgets or their businesses and saying they’re too uncertain and that they want to defer their decision. Some business owners are avoiding making any purchases that might signal a different approach for them than their workforce, and there are the fairly well know problems with availability of credit.”
In some markets, not just for Jaguar, 50 percent of credit applications were being rejected when normally most would go through, said Smith.
Smith, 47, became acting CEO of Jaguar Land Rover in April following the death of Geoff Polites and was confirmed in his position on June 2. Prior to this he was chief financial officer of the company.
Adding to Jaguar Land Rover’s difficulties was the fact that the UK market — Jaguar’s second biggest — had fallen much faster than economists had expected.
In some markets, not just for Jaguar, 50 percent of credit applications were being rejected when normally most would go through, said Smith.
“We’re quite concerned about how the UK has been, turning down month after month,” he said. “There’s not a lot at the moment apart from the interest rate cut that’s going to change that.”
Smith said he had asked the UK Chancellor of the Exchequer (Finance Minister) Alistair Darling to reconsider planned vehicle taxation rises. “The German government has just implemented actions to defer some of their changes for a couple of years, and we’re asking the British government to defer the new higher levels of taxation due next April and to cancel or defer the showroom tax. What that [tax] does is discriminate against people buying new cars.”
Jaguar Land Rover no longer issues monthly sales statistics, but Smith said the global market for premium automakers was down “between 20 and 40 percent, depending on which market you’re talking about.”
On the subject of the unified European CO2 taxation structure that leading carmakers have been pressing for, Smith said this idea was “a dream.”
“It will never happen, unfortunately,” he said. “The industry has pushed for this, but there’s no appetite [among member states] for tax harmonization. The situation is getting more and more chaotic. It inhibits everybody’s business because it makes it very difficult to plan when tax rates and regimes are changing.”
[Source: Automotive News Europe]
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