My editor told me to rewrite this column. I had to rewrite it because my first draft had become almost biblical in its prophecy.
Initially, I had written that the population of Great Britain was sorely oppressed by the high price of new cars and the rising cost of petrol. Somewhat lightheartedly, I recommended that British consumers should emulate the French, who blockade roads and paralyze the country whenever they feel irritated by government shenanigans.
In a dispute with the French government over the rising price of fuel, French fishermen recently blockaded the English Channel ports of Calais, Boulogne, Dunkirk, Le Havre, St. Malo and Cherbourg. The blockade stranded thousands of British truckers and vacationers on both sides of the water. Rather than complain about the French, I called on the British to try a blockade of their own.
Well, call me psychic. This morning, the kids walked to school, and my wife and I trekked to the stores for the week's groceries. The car, you see, is out of gasoline because British truckers have blockaded oil refineries to protest the price of fuel.
My incitement to anarchy was intended in a lighthearted vein. More seriously, I wanted to point out that the public outcry over vehicle prices in the United Kingdom ignores one major point - market forces. Rather than take to the streets and blockade the roads, the Brits pay up. Call me old-fashioned, but if people are willing to pay me $20 for a product worth $10, what am I going to do?
Before this recent bout of mayhem, the perfect illustration of British anger verging on apathy was a halfhearted boycott of fuel stations and a blockade of the port of Dover in July. Filling stations reported business as usual, and fewer than a dozen vehicles turned up at the port. Unlike the French who turn out en masse to win concessions from their government, the British grin and bear it.
It is interesting that the British government has intervened on the issue of car prices. After a lengthy inquiry, it has told British manufacturers and distributors to slash the price of vehicles. Now prices are falling, with the biggest cuts among the luxury brands. Mercedes-Benz dropped its U.K. prices 9 percent while BMW reduced prices 11 percent. Mercedes-Benz dealers said imports from continental Europe were threatening the whole infrastructure of its U.K. operation before price cuts were announced.
So, pressure from the public through the government can have an effect - or can it?
Let us consider market forces. A report in U.K. motor industry newspaper Automotive Management revealed that franchised dealers are behind a surge in unofficial imports from mainland Europe and Japan. Basically, these dealers are trying to regain customers by offering cheaper cars.
According to the British Independent Motor Trade Association, gray-market imports of new cars will total 140,000 units in the United Kingdom this year. That accounts for 16 percent of the market for retail cars. U.K. dealers are under pressure from online companies such as Virgin Cars, OneSwoop and even supermarkets, which sell new vehicles at lower cost.
The publisher of consumer magazine Car Import Guide has added more pages to its latest issue to accommodate dealers who advertise gray-market imports.
To survive, some Ford dealers are importing cars from mainland European dealers and selling them at non-franchised sites. It is only a matter of time before mass-market automakers cut prices accordingly. In a statement that accompanied its price cut, BMW left no doubt who the automaker hoped to neutralize: 'This (price cut) will threaten the very survival of the importers and dot-com companies which sought to make a fast buck.'