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Where brand new cars go to die

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Where brand new cars go to die

Hundreds of millions of brand new cars are left to rust in huge parking lots all over the globe after no one wants to buy them.

The 2014 world economy is slightly starting to come back to life after the economical crisis has hit it hard in the past few years. One of the most important industries on the globe, car manufacturing, is looking brighter than ever for some companies while others are struggling to survive by closing their factories and sending home thousands of people.

This happens because there are more products available than needed and usually when this takes place, prices go down. But no one is lowering brand new car prices and we all know that the vehicles we see in car dealerships these days will most likely be forgotten somewhere on a field. This is no joke because car companies prefer to do this than to sell them at lower costs and eventually make up for some of their loss.

A huge number of cars are being produced each year in Europe and in the United States and most of them never reach customers because there are no people who can or want to afford them. This has led to a whole new practice, that of huge parking lots filled to the brim. They occupy large hectares in different countries but most of them can be found on the “Old Continent” and in the “New World”.

A quick search on the web is showing us that the automotive industry prefers to use this trick to masque the weak demand for new cars and General Motors makes it to the first place, according to some reports. The estimates are showing that more than 10 billion cars, in perfect running condition, are currently used by the population. This basically means more vehicles than people and this is because most families own an average of two or even three cars.

Despite this, automakers keep producing and launching new units which have absolutely no chance of ever finding an owner who is willing to spend his / her money to buy them. Google Maps images posted below are showing tens of thousands of brand new and unsold cars parked near Sheerness, Corby or Northamptonshire, Swindon and Sunderland in the UK, in Civitavecchia port in Italy, in Baltimore and Maryland in the U.S., in the Valencia port in Spain or in Sankt Petersburg, Russia.

This information may come as a shock for most of you but all of it is true. Tens of thousands of brand new cars are being produced each week but only a small part of them manage to find new owners. The only reason for which car companies don’t sell them for a cheaper price is that if this would happen, chances are no one would ever buy a brand new car for the full cost of it and everyone will wait for the cost to go down.

This is a win-lose situation either way, mostly for car companies, because they can go bust if they don’t sell some of these models but they can also go bust if they do it for a significantly cheaper price. To try and cut down production costs, most carmakers have opened new facilities in China or India, where labor is cheaper. But what would happen when salaries will eventually go up over the following decade? Will the bubble burst again? Let’s hope not, because if the car industry goes down it will affect us more than we can imagine.

by Cristian Gnaticov (my Google+) - Friday, May 23rd, 2014 - filed under Editors, News, Other, Sticky news. Image credit: .
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