Tuesday, December 23, 2008

Losses in the Automobile Industry

There are a lot of talks in Sweden about the crisis of the two Swedish car manufacturers Volvo and Saab, and their owners Ford and General Motors, respectively. In the general financial recession, it is important to notice that many more car manufacturers are in a state of crisis at the same time. Japanese manufacturer Toyota has announced that it may suffer from the historic first loss in 71 years of car manufacturing. Also Japanese Honda slashes its profit forecast, and has announced it is ending its Formula 1 engagement. Indian owner Tata of British car manufacturer Jaguar Land Rover has asked the British government for financial aid to support the factories in Britain. It may be that we see a race to the bottom, and that some car manufacturers actually have to stop making cars permanently. It was said even in the recent economic boom that there were too many car manufacturers in the world, too many cars produced for the world market. This recession may bring the harsh solution to that problem. I hope that, however harsh, it is not too harsh on people and their dogs.

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