| With assumed German business precision, BMW purchased Rover
five years ago. They anticipated a lucrative car market. Both the domestic and
overseas market looked rosy.
Unfortunately,
the World has changed. Thanks to a higher than necessary interest rate policy,
an overvalued Pound, wage inflation, a high tax on petrol exasperated by rising
World fuel costs, and a dithering Government who can't make their minds up
about joining the European Monetary Union, declining car sales (with new car
buyers flocking to Continental Europe), and a vast growth in technology and
Internet marketing, its hardly surprising BMW have had enough and have marched
back to Munich!
Like most big
corporates who came to the UK intent on making a 'killing' to a naive British
public, BMW found the public are getting smarter. They also found that the
Rover car just wasn't selling - it was overpriced and its lumbering style was
mostly purchased by the over 50's and those who could afford a luxury car. Pity
Leyland lost the Mini & the Metro!
So here are the
reasons in a nutshell:
- A dithering
British Government who can't make their minds up about joining the European
Monetary Union.
- Britain has
the highest petrol prices in Europe (thanks to 85% in fuel taxes). Car owners
are abandoning luxury cars for economocal models.
- NEW car buyers
are continuing to abandon the market in droves, driving down UK sales by 12.3
per cent in February compared with a year ago
- Rover
experienced a 26 per cent collapse in sales in 1999, a slippage that continued
in the first two months of this year.
- Rip-off
British car prices, lower than expected sales, and government intervention, and
higher fuel prices have caused car manufacturers to re-think their strategy.
(BMW obviously didn't waste any time - will others
follow?)
- BMW sales of
luxury cars Worldwide have been falling. January sales were just 5,454, a drop
of 24 per cent compared with the same time last year.
- Last month
Ford revealed plans to cut 1,500 jobs at Dagenham
- Greedy car
manufacturers and high taxes, (not necessarily dealers), are responsible for
high British car prices
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