• 2009-03-18
That buying a new car is one of those things that can easily be put off, particularly in our current circumstances, is clear for all to see. It hardly makes sense to spend a lot of money. It's not as if a car is a vital necessity. But does that then mean that the car business will soon meet an untimely death?

Every day, the international media reports one or another of the major car manufacturers taking decisions to close down factories or suspend production. For their part, car dealers, unable to ensure cash flow, are forced to sell new cars at well below their market value. That the sales of new cars have fallen drastically, creating massive losses for car dealers, can be seen on every street corner.

Driving along Riga's Skanstes Street yesterday, for instance, the windows of the Inchcape Motors showroom were dark, and its closure was confirmed by the absence of any signs of life. It turns out that the Latvian dealer for Mazda and Jaguar has dismissed nearly 80 employees and shut down several car lots. The closure of showrooms and dismissal of employees is not confined to Riga either. In the Kurzeme region for example, Baltic Motors has also decided to dismiss its employees and close down its dealership.

It's not just us who have it so grim though, things are no easier for our neighbors. My Estonian friend, with whom we discuss issues of national significance as frequently as personal matters, tells me that it is even worse for them. Even the large car dealers are significantly reducing not just staff numbers, but also salaries, and, one after another, closing their showrooms. Hard times are hitting both small dealers and the giants of the motor trade, including the biggest car dealer in the Baltic states, Silberauto. They have reduced staff salaries by 20 percent. It's said that the company's manager has had to halve his pay and put the building of his new house on hold. It was already clear that their sales figures had been falling year on year, but by now the question has become how, and if, they will survive as they are? Furthermore, rumors abound that the company is doing its best to intentionally bankrupt its used car business.

Currently, counting every penny, many people have completely given up driving their cars. That, though, can be seen from a positive aspect 's there are fewer traffic jams and less exhaust fumes pervading our city environment.

Ingemars Austrums
Riga, Latvia

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