A quick fix
I just want to help, Trevor
THE WORST JANUARY in eight years. The biggest drop since 1984. A market that’s half the size it was just two years ago. Makes me feel terribly guilty I’ve contributed to the dismal state of the South African vehicle industry or – as some are calling it – the carpocalypse.
I haven’t bought a new car in eight years. Eight long years. I’m actually ashamed to say it, but it makes me feel as if I’m not a proper South African. We’re a car-mad country. How else can you explain 5 000 people turning up night after night paying in excess of R200 to have an arrogant Englishman make them feel insecure about their ride. (Jeremy Clarkson must be the only guy involved in the car industry still raking it in.)
Our love of the automobile may have been born out of necessity – dodgy trains and even dodgier taxis – but it was never pure invention. In other markets, maybe. Take the trend towards buying large offroaders. In the whole of Europe, Japan and the parts of the United States sans wide-open spaces buying something the size of a barn and the ground clearance of an elephant just doesn’t make sense. The Chelsea Tractor and the Manhattan Megamobile is rightfully maligned as overkill.
But South African cities are never more than an hour away from the bundu. And during the Johannesburg monsoon we’re currently experiencing the bundu and the donga are confronted during the daily commute. The sports and utility in SUV have some meaning in SA. And yet carbon credits and tax breaks for ditching your SUV or 300kW racer are now being mooted for Trevor Manuel’s Budget. Good intentions, surely, but the road to hell is paved with it. And our paved roads are from hell.
In whatever form – bridging finance, bailouts, subsidies, guarantees – SA’s manufacturers and component suppliers are going to need some sort of Government assistance. Help may be on its way. I’ve no problem with that. It will, of course, open the floodgates for other suffering industries to do the same, as is happening in the US.
Again, I’ve no problem – not since Larry Flynt, publisher of Hustler, also approached the US federal government for $5bn to help the adult entertainment industry through hard times. Or should that be overcoming a soft market? (Just another example of how in many male minds cars and girls are inextricably linked.)
Speaking of stimulus packages, I believe Manuel should go beyond assisting the manufacturers and include dealerships and customers. We should go straight to the heart of the problem and provide a quick fix. I – like so many others who drive pre-9/11 and MP3-compatible vehicles – should be forced to replace them.
The situation in showrooms is now so dire that you can get a R20 000 cashback offer on a car that retails for less than R80 000 or a guarantee that when you’re laid off they’ll take it back. How about Government stumping up some of that cash? It’s two birds with one stone: cash flows into the system to be spent on other things (our own adult entertainment industry isn’t doing so well either, I understand) and the motor industry and the lenders get an immediate boost.
How such a scheme could be made to work I leave the banks to figure out. After all, it’s the financial institutions that created the collateralised debt obligations and other complex instruments that got us into the mess in the first place.