In our last flashback to the “noughties”, we had a look at China and how they’ve been moving up in the automotive industry. Now, we’ll be increasing the scale and having a look at the whole world, and how it was affected by the financial crisis.
The Recession Hits
Late into the decade, near the end of 2007, the world began undergoing a recession. Something to do with banks in the US loaning money to people who couldn’t return it. It had a catastrophic effect on the car industry. The US government had to take control of General Motors. Then they had to kill off Pontiac and Saturn, and they had to sell off Saab to Spyker. They may also be killing Hummer. Chrysler Group had to merge with Fiat Group to help stay afloat. Toyota’s chief admitted late in 2009 that the company was in bad shape. Ford is selling Volvo because of the recession as well. Luckily, Pontiac and Saturn were the only real casualties, although we might be have to add Hummer to that list soon. In Europe, the recession was also harsh to the car world. New car sales plummeted and the British government launched the scrappage scheme to encourage people to buy new cars. This sort of scrappage scheme was also introduced in the US, although it was canceled shortly after. However, it took some good cars to the grave with it, including the likes of Astons and M division BMWs. Even though the financial crisis is still felt hard in some places, it is beginning to fade away and the motor industry might get on its feet again. Let’s hope so.
Wall Street image credit: Sparkx 11