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2010
By Christopher | January 4, 2010
I guess the easy bit is just to wish you a Happy New Year! The slightly more complicated bit is to forecast what sort of year I am happying you into.
Still recovering from the missed forecasts of 2009 most people are being pretty circumspect about the 2010 UK prospects so it seems appropriate to attempt some more specific forecasting rather than leaving everyone confused by platitudes and cautious legal language.
Frankly the forecasting task is made more difficult by the certainty of a general election but it seems 2010 will wretchedly see unemploymemt rising to 2.9 million and probably staying there. Inflation will hit 3.5% with interest rates remaining at or around 1% and largely ineffective on the real economy. And I can see just a 1% growth in the economy which is not exciting and, sadly, a fall in house prices of about 5%.
Car registrations are difficult to read because history cannot help with what will happen now the scrappage scheme is off and VAT is back to 17.5%. Whilst I am obviously outrageously biased towards the SMMT and its forecasts I am in fact forecasting a 1.8 million new car registrations figure for 2010.
So in summary a difficult year; the good news comes from the fact the automotive industry has suffered massive pain in 2009 and whilst likely to bump along in some pain in 2010 the worst is behind us. Saab and Alfa Romeo look to be the brands with a tough and uncertain future – Saab is well documented and Fiat’s Sergio Marchionne is the first man in a long time at Fiat to be thinking the unthinkable and seemingly wanting each brand to be profitable in its own right.
In wishing you a Happy New Year I am essentially forecasting an extremely difficult year and can only hope we have all made the really tough survival decisions in 2009 that will take us through 2010.
And my pet hate? Numerous experts saying things will never get back to where they were. Of course we will reap the benefit of our lower cost base but it is just plain old human nature that when things improve we start wanting to do more (good) and then start accepting costs back into the business model and getting fat again (BAD)!!
Christopher Macgowan
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