Seasonal Fluctuations in the Motor Vehicle Industry: A Comment

Abstract

SEASONAL fluctuations in unemployment are generally considered to arise, in the main part, from variations in weather conditions and from movements in demand. A comparison of preand post-war patterns of seasonal variations in the motor industry reveals an interesting example of the influence of changes in production practices, allied to changes in the seasonal pattern of demand, both elements reflecting in part the lessening impact of the annual Motor Show. The statistics used in this discussion relate to unemployment in the city of Coventry, in which the prime influence upon trends in employment (and unemployment) is the motor industry. In I967, for instance, the motor vehicle industry, defined by minimum list heading 38I of the Standard Industrial Classification (C.S.O., I958) accounted for more than 40 per cent of manufacturing employment in the area. In the pre-war period, the percentage figure was considerably higher than this. It has been shown that movements in total unemployment in Coventry very closely reflect variations in the level of activity in the motor industry (see Smith, I 97 I), and it is these figures which are used in the following discussion. Figures I and 2 illustrate the seasonal pattern of unemployment in Coventry for the years I927-38 and I95I-69, respectively. The difference between the two diagrams is dramatic, displaying almost opposite trends. During the pre-war period, the seasonal 'peak' in unemployment tended to come in the summer months; in particular from June to August. This sort of pattern was likely to have been associated with the practice which car manufacturers made of spending the summer months in 'research and development', intent upon being able to produce new models in time for the Motor Show, which customarily took place in the autumn (see Turner, I963). During the I 930S, the car firms were numerous, but generally relatively small. This meant that resources were limited, so that 'research and development' and production could not be carried on simultaneously. However, in the years since the war, this situation has ceased to dominate. The car producers have grown in the scale of their activity, through mergers and in response to the large-scale expansion of demand. It is now possible, therefore, to carry out research and