A model to follow? The impact of neoliberal policies on the British automobile market and industry

Publication Type:

Conference Paper


Gerpisa colloquium, Kyoto (2014)


In this article we investigate from an historical perspective the impact of the on-going financial and economic crisis on the production and consumption of cars in the UK. We develop our analysis from two angles that correspond to distinctive features of the British configuration.

First, we review the implications of the progressive disconnection between the production (84% of which was exported in 2011) and consumption of cars in the UK (88% of which was imported in 2011), as it has emerged from the late 1970s and up to the present crisis.

Second, we assess the impact of the diminishing labour share of national incomes and of the increasing inequalities in the distribution of incomes amongst households on automobile markets for new and second hand cars before and during the crisis.

Since the origin of these dynamics can be clearly traced back to the neoliberal policies introduced by Margaret Thatcher from 1979 onward and reproduced by the following Conservative and Labour governments, we also consider to what extent the results of these policies in terms of automobile production and consumption in the UK can be hailed, as it has often been the case and in particular during the on-going crisis, as a model to follow for other automobile countries.

Contrary to this conventional wisdom we will argue that the British neo-liberal model based on the attraction of foreign investment and the deregulation of labour and product markets is ill suited to sustain the development of both automobile mass production and consumption. First, because it makes production dependent on low wages and low costs, breaking the “fordist” link between mass production and mass markets that has been historically at the roots of the development of the automobile industry. Second, because it promotes a growing inegualitarian distribution of revenues and incomes that reduces the access to new cars, turning the automobile market into a shrinking luxury market, highly dependent on an unsustainable – in the long run – provision of credit.

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