cars in absolute figures.
There has been a gradual reconversion of the four American car trusts conversion even before the current gramme staggered over several years.
reduced its outlay for this programme during the current year from 1,100 mil lion dollars to 1,000 million dollars. Chi reduced its programme from 350 millior ors, which was the last company to ente burg: the small-car field, will invest more in this field this year than it did last year: 1,300 million dollars as opposed to 1,200 dollars.
The reticence corresponds both to the fall in profits (and therefore in the companies own resources for investment) and to the increase in the price of credit and the uncertainty weighing on the future of the automobile industry and therefore on its outlets. Obviously, the household of a factory worker or a white-collar worker can make quicker and broader reductions in its budget under 'car" than under "food' or 'clothing', not to mention "rent and related services like heat, clectricity, gas. water, and so on.
I can therefore be expected that during cach economic recession there will be a decline in car sales the rapid expansion of the car industry during the 1950s and 1960s-one of the main stimulants of the accelertoward production of small cars. Am-ated growth of the economies of the erican Motors, the least important of imperialist countries during this perithe four, had in fact carried out this re-od is comine to an end.
crisis broke out, The three other trusts market?, which has already made its have set in motion an investment pro- appearance in the United States, is coming more and more to the fore But, these programmes are less am- in capitalist Europe and Japan. This bitious than had been expected, Ford is clearly revealed by the decline in the annual prowth rates in the car sec tor, This is shown most vividly in the figures for the six countries that orisier, harder hit by the profitability crist, einally constituted the Common Market (West Germany, France, Haly, to 265 million dollars. Only General M, Belgium, the Netherlands, und Luxemsaturation of the mankets is explained by the fact that given the present structure of incomes, practically all the households that want to buy a car are able to do so (either on credit or on time) without disastrously eating into the parts of their incomes set aside for articles of basic necessity already own a car. Undersuch conditions, current production serves an almost exclusively replacement function. it tends less and less to increase the general sales of cars.
Around if there were a considerahle increase in the incomes of the lowest paid layers of the laboring population ly reduced. The second possibility is totally excluded in the near future.
The phenomenon of the saturated From the standpoint of outlets, the This situation could be turned aprivate car. or if the prices of cars were very sharpthe US or Western Europe, As for semicolonial countries, which have in their turn been drawn into the wave of motorisation, the income structure is such that pur- scale. chases of a private car is in practice limited to the middle classes and a very tiny layer of the labour aristocracy. The saturation point is therefore reached much sooner.
The bureaucratised workers states have in their turn launched a programme of accelerated motorisation. But these countries scarcely form a significant additional market for the cur industry in the imperialist countries. In practice, their governments prevent imports of private cars, except in minimal proportions, If they construct or extend their own car industry in collaboration with the capitalist trusts, it is above all the sector that produces machines for car construction and not the car industry itself that will win new outlets.
To the saturation of the market for reasons relating to buying power must he added phenomena of market saturation for physical reasons. In the past twenty years neither construction of roads nor expansion of traffic and park- aid of British Leyland by grunting it ing facilities in the cities of the imperfalist countries has kept pace with automobile slaes and production ol prisate cars and trucks. The result has been growing traffic difficulties and hands. a rapid decline in the utility" of the The crisis in the car industry has ac centuated international competition. As sales in the internal markets of combined with intensified competi tion is threatening the very existence of the least profitable firms.
Up to now, it is mainly BMW, Citroen, Chrysler (including its French subsidiary, Simca), and British LeyTand that seesa threatened. Chrysler, which had a close brush with bankruptcy during the previous recession in the US, is nearly running at a loss and is finding increasing difficulties in obtaining credit. Citroen was saved from disaster only through its merger with Peugeol. The fate of BMW and of Toyota, the financially weakest Japanese car trust, will most likely be decided by mergers on a national But the situation of British Ley land is the most dramatic, reflecting in a striking manner the general decline of British imperialism in the international capitalist coonomy. BHEish Leyland is itself a merger of all the British car firms that were still in business. If it has to merge to save its elf now, ther merger will have to be with a forcin company. In that case it would in fact be absorbed by one of its foreign competitors Since British imperialism cannot tolerate such a possibility, it is more likely that the state will come to the massive subsidies, by taking over a minority share of the stock, or by par tially nationalising it while leaving a minority of the stock in private What is starkly confirmed in the world car crisis is the deep-going crisis of world capitalism- the car crisis is a manifestation of the death agonies of the capitalist system.
Red Weekly 17 October 1974 Page 9