Car manufacturers introduce price hikes after rescue package
It has been revealed that Vauxhall and Ford are looking to increase the price of their new cars by as much as 5% after confirmation of the UK government's £2.3 billion liquidity package. Even though the £1.3 billion coming from the EU has yet to be cleared it appears as though UK car manufacturers have taken this opportunity to increase prices even though business levels have fallen to record lows.
However, the 5% increase in new car prices should be considered against the massive reduction in prices over the last 12 months as the industry has chased sales in the most difficult of trading conditions. Comparisons between the car manufacturing industry and the UK banking sector are seriously wide of the mark as many car manufacturers have placed substantial numbers of UK staff on "holiday leave" on full pay.
Whether the forthcoming liquidity package will be enough to see the industry through the ever worsening recession in the UK remains to be seen but many experts have pointed out that the UK package is only a fraction of that being made available to US car manufacturers. The longer the recession continues the more chance of seeing some of the best-known names in the car industry disappear or at least downsize to try and save money.
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