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EDITIONS
Monday, 6 December, 1999, 14:59 GMT
Cars: still motoring
early motor car
British motor cars were the envy of the world
The British car industry has come a long way since the days of Morris and Nuffield, as the BBC's business correspondent Nik Wood reports, despite the spread of foreign ownership.

While Henry Ford was pioneering mass production techniques in the US - his Model T enjoyed a 50 per cent share of the market - the UK car industry consisted of many small manufacturers.

A Century of British Industry
Researchers recently uncovered 130 different companies in Coventry alone, although some never got so far as putting a vehicle on the road.

car workers
Mass production was slow to develop
Amid the Daimlers and the Rileys were the Beeston and the Hotchkiss, the Centaur and the Stoneleigh. Not all the marques have stood the test of time.

Taking shape

But after a period of consolidation, the British car industry began to take shape in the 1930s, by which time it employed more than one million people turning out 500,000 vehicles a year.


In the 1950s British motormakers adopted a Fortress UK policy

Motor industry consultant Karl Ludvigsen
The sector was spearheaded by Rolls-Royce, which had established a worldwide reputation for quality, not just in its cars but in other engineering fields as well. Other names established by then included Triumph, MG, Bentley and Aston Martin.

By 1939 there were only 20 independent car makers, and the UK was the second biggest producer after the US - but that was not to last.

Missed chance

Motor industry consultant Karl Ludvigsen believes the industry missed its chance after World War Two.

Chrysler strike
Strikes paralysed the industry
"That was an opportunity to invest very strongly to develop quality products that were marketable round the world, to develop export markets," he says.

"But instead British motormakers adopted a fortress UK policy, focusing on the domestic market and not adequately developing products for the globe. They never developed the economies of scale and production that were necessary in the 1950s and 1960s to be able to cost your cars at a reasonable level."

Decline and consolidation

Consolidation continued, aimed at strengthening production capabilities in the face of growing world competition. It reached its peak in the 1960s, when BMC - essentially Austin Morris - joined with Leyland, producer of Rover, Jaguar and Triumph cars, to create British Leyland.

British Leyland
British Leyland tried to protect its market
But the new giant never realised its mass market potential. The 1970s were difficult enough, with high inflation and the oil crisis, but Karl Ludvigsen says the company was probably its own worst enemy.

"Combining Leyland with British Motors turned out very badly. Some poor decisions were made and people who took them didn't really have an adequate grasp of how the global car market could be tackled, so the next step was government intervention to maintain a role for Britain in the car industry," he says.

After a series of strikes, British Leyland was effectively nationalised in 1977, and 10 years later adopted the Rover name.

Battle against imports

But British manufacturers, for so long concentrating on the domestic market, were facing a battle on their own doorstep. Imports now accounted for more than half of all car sales, and foreign manufacturers were in predatory mood.

Japanese companies soon recognised that, despite its past labour problems, the British workforce could be as efficient as its competitors. Toyota, Honda and Nissan built plants in the UK.

For the past three years, Nissan's Sunderland factory has been rated the most productive in Europe.

According to Karl Ludvigsen, the arrival of the Japanese was a key event. "On the one hand, it says Britain is a good place to make cars in their judgement.

"Secondly, their insistence on efficient production and high quality products has helped raise the capabilities of Britain's supply industry. More than half of the car is made by suppliers so this a very important criterion for any national industry."

All foreign-owned

However, it is an industry which ends the century with all its great names now in foreign hands. Rolls-Royce and Bentley are owned by Volkswagen (the Rolls name will pass in a few years to BMW); BMW bought Rover; and Jaguar and Aston Martin are part of Ford's portfolio.

Britain still has a powerful role in design and engineering, but to find the country's largest British-owned manufacturer, one has to head to Blackpool and the TVR sports car factory.

However, nearly 800,000 UK jobs are still dependent on an industry which has produced 1.5m cars in 1999. And analysts argue that whichever badge is on the bonnet, British-made vehicles are still a quality product.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Nick Wood
Working Lunch's history of the British car industry
Links to more Business stories are at the foot of the page.


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