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by beppi » Sun, 18 May 2014 6:04 pm
Yes, the car industry has a (temporary?) overcapacity due to the economic situation and people thus buying less new cars. This is normal in a cyclical industry.
The difference here is that, due to politics (and national pride), the normal reaction of a healthy market is eliminated and manufacturing is still running.
This can and will not go on much longer, because neither car producers not governments can finance this forever. Eventually manufacturing volumes will reduce (and knock-on issues like factory closures, unemployment and smaller steel markets will be dealt with), the stockpiles will be sold and there will be a shortage of cars in the market - probably just in time for the next economic boom, thus creating another market imbalance.
What could we learn from it? In principle, the stupidity of interference in free markets (after all, no car maker is doing this voluntarily). But I doubt that politics will in fact see this ...