How can the car industry survive the global spending crunch? Alistair Houghton investigates

BANKS have spent recent weeks crying out for Government aid – now their chorus of despair is being joined by the UK’s motor industry.

The housing and finance markets may have been the most high-profile victims of the credit crunch, but the motor industry is also being crippled as consumer spending slumps. The latest UK car sales figures, from the Society of Motor Manufacturers and Traders, released this week, make grim reading. Last month just 330,295 new cars were registered, down 21.2% on the number registered in September, 2007.

Luxury brands were among the worst hit. Land Rover saw 4,907 new registrations in September – down 49.7% from the figure of 9.756 in September, 2007.

Vauxhall saw sales fall 16.51% over the same period, though the Ellesmere Port-built Astra remained the UK’s third best-selling car last month.

Jaguar saw a 3% sales rise, but that was thanks largely to the introduction of the new XF model late last year, rather than growth in its existing models such as the Halewood built X-type.

But the industry is not taking the decline lying down, and is calling for Government help to get it back on its feet.

The motor industry remains a huge employer – SMMT figures show it employs over 850,000 people in the UK and has a turnover of £51bn.

In our region, Jaguar Land Rover (JLR) employs more than 2,000 people at Halewood while Vauxhall employs more than 2,000 in Ellesmere Port and thousands more are employed in the supply chain.

The downturn has hit JLR hard, though it is trying to make up for falling sales in its core US and UK markets by increasing exports to developing markets such as Russia and China.