Essay : L’affaire Renault
A critique of BL and MG Rover’s involvement with the French giant.
Back in the 1970s, BL and Renault had been working together on a joint marketing deal that could have resulted in the British company selling Anglicised Renaults instead of the Triumph Acclaim. As this story, put together by Asopèe Simeli shows, the affair ended in acrimony.
However, it did not end there, and in an interesting twist of fate, MG Rover were quite close to producing a revised “Renault”. The end result was largely similar… it never happened.
IN the late 1970s, BL had a very big problem: their range of medium sized models comprised of a lineup that was either dated (Marina, Maxi) or had a chronically bad reputation (Allegro) with customers. This was not only the case on the UK market but it was also seen as a Europe-wide situation. In truth, strategists (as well as everyone else) within the company well aware of the situation, and knew that the only cure for this terrible situation would be new model ranges…
Well, you might say that this dearth of capable models in the middle market was no great problem, as the other market sector models could make up for the medium sized cars’ shortfall. However, this is patently not the case now, nor was it ever thus. In reality medium sized cars will carry a company’s and provide a large proportion of sales volume.
To analyse this let us put this into a modern context regarding the best sellers of Western European countries:
The VW Golf is the best seller in Austria, Belgium, Germany, Luxembourg, Norway and Sweden.
The Ford Focus is the best seller in the UK and Denmark.
The Opel Astra is the best seller in Ireland and Finland.
And the Renault Mégane is the best seller in France.
After the huge success enjoyed by the 1100/1300 range in all its various flavours, the two cars devised to replace it, the Austin Allegro and Morris Marina, quickly established themselves as something of a let down. Their shortcomings are discussed in detail in their own development stories, but major factors responsible for their lack of relative sales success was a lack of crisp style, flair and packaging that the 1100 range embodied.
The 1970s marked a time when Japanese cars began to take over from the British manufactured cars as the darlings of the public. Datsun, Honda and Toyota crept in and provided reliable, efficient cars, which were generously equipped and most importantly, reliable. Unlike strike torn Britain, the Japanese factories never stopped producing, so buyers were confident of receiving the car that they had ordered without undue wait. Those that did remain loyal to BL (or Chrysler, or Ford, or Vauxhall) were treated to a long wait before they could get their hands on their new car. Of course, a car built between strikes – or one that sat on the production line during a stoppage was never going to be a dependable car. This situation eventually led to some of the member countries of the European Economic Community (the European Union as it was known then) introducing import restrictions on Japanese cars in order to halt the growth of their market share.
Due to the pressures of introducing the Metro supermini in 1980, the release of the all important mid-sized cars needed to be put back. As a result, the LC10 (which was conceived by Spen King and Gordon Bashford back in 1975) was very much car for the seventies. BL’s whole focus was that LC10 would be launched, and along with the Metro, would be responsible for the product led recover that would be responsible for the company being saved.
However, because of this unavoidable delay in product planning, there was still a need for BL to offer a modern car, which would fill the gaping gap between the Metro and the LC10 range. With few resources and free cash, BL looked around to find a partner in 1977. The first of many companies to be considered seriously was Renault, the vast French government owned company. As it was, BL and Renault had already been involved on the truck side of the operation, and although this was insignificant in the grand scheme of things, it had progressed reasonably successfully. Therefore, the Derek Whittaker-led Leyland management team thought that it was entirely logical for this co-operation to be expanded to involve car production. BL saw a very favourable, well managed company with a wide range of cars, which progressed neatly from the supermini R5 through to the executive R30. There was very little overlap between the ranges. Although BL management may not have known it at the time, Renault had the R9 medium-sized car in development – something that would have suited their needs perfectly.
Following BLMC’s the initial overtures during during July 1977, the French viewed co-operation with the British company as an excellent opportunity for expansion with little risk. Out of two companies, BL was significantly the weaker but it did still possess some wonderful assets: The Land-Rover/Range Rover ranges, for one. Then there was Jaguar, Rover and Triumph, which at the time were still largely untarnished. In the melting pot of associated marque names, BL also possessed Austin, Morris, Wolseley, Vanden Plas, amongst others… the list was endless.
However, British Leyland were plunging deeper and deeper into crisis, and this meant that management were forced to look inwards rather than outwards. As discussed in “The Whole Story”, Ryder’s plan collapsed and in came a new Chairman and chief executive: Michael Edwardes. There was something of a pause in discussions, but once ensconced in the lead role at BL and up to speed on how negotiations were going, Edwardes continued the company’s talks with Renault.
A deal began to take shape between the parties, which essentially amounted to this: in return for the production and distribution rights for the Renault 9 in the UK, Renault could distribute the Land Rover/Range Rover ranges across Europe and in the USA.
However, the deal was never rubber stamped, and as talks ensued, it became apparent that Renault had greater plans. In the French version of the plan, the Renault 9 would be sold in Britain alongside its BL counterpart and yet, BL could not sell their version in Europe. Renault considered itself in the stronger bargaining position and continued to add conditions that benefited itself, at the expense of BL. One such condition was that Renault should be able to distribute the entire BL range across Europe. It was obvious that Renault saw itself as the dominant partner over BL, and were keen to turn this situation to its advantage. Clearly Edwardes and other members of the board were rather underwhelmed with how negotiations were going: in his book “Back From The Brink“, he stated, “It was not a two way collaboration. Nevertheless, it warranted thorough consideration, and we put in a great deal of time before we finally decided that to join forces with our French colleagues would not be to our ultimate advantage.”
It did not help that Renault had its own expansionist plans, which involved North America. The company were very keen to remain a global player, and in order to do this, it could not afford to leave the US market ignored. Because of this, whilst in negotiation with BL, the French also held talks with AMC about co-operation and a joint marketing strategy. Either way, it seemed that the French could not lose, because both companies possessed “blue chip” offroad divisions (BL-Land Rover and AMC-Jeep), and this was an area that the French were keen to get in on.
During the BL-Renault talks on April 1st 1978, Michael Edwardes came in for something of a shock: The Financial Times announced the signing of a deal between American motors and Renault. It was a shock to Edwardes because he only found out about Renault’s deal with AMC through the press, rather than directly from Renault. Edwardes felt chagrined, for sure, and it immediately sent BL’s management (notably Mark Snowdon and John Bacchus) heading towards Honda’s door. This process had actually already been underway (and can be read about in full in the Triumph Acclaim development story) because of the BL board’s ambivalence towards Renault. So when the Renault-AMC announcement was made, BL was already in the process of looking further afield. Edwardes had assumed that negotiations had ended; Renault, however, had not.
The AMC-Renault deal had a familiar ring to it: AMC was to market the Renault 9 (as the Renault Alliance) and the rest of the Renault range in the USA, but Renault would have the rights to sell the Jeep line across Europe.
Perhaps it was inevitable that Renault would shun BL when it had past history with AMC. After all during the 1960s, Renault made a deal to build AMC Ramblers in Belgium and AMC had been building and selling Renaults since 1975. Following the AMC-Renault deal, the ageing and quirky AMC range was gradually replaced by the Renault range. Although Renault invested millions of Francs in AMC, the cars were not what the American public wanted, with the exception of the Jeep range. Renault were forced to sell the AMC marque to Chrysler when they realised just how much money the American company was losing. However, Renault did keep hold of the Jeep franchise well into the 90s.
Renault’s selfishness over the 4x4s produced by AMC killed that company; it would be easy to see how the same potentially could have happened with BL.
Ironically Renault seemed unable to drop the fact that a relationship had not been forged, as there was no doubt that its management team led by Bernard Hanon felt that Edwardes and BL were to blame for the collapse of collaborative talks. Edwardes saw things differently, citing the desire for BL not be swamped by Renault, and end up in a, “…Peugeot-Talbot situation, where all the design and engineering – and indeed most of the manufacturing taking place in France, with the British operation becoming very much a local satellite”, as Edwardes described it.
Either way, the affair was surely over. Renault blamed BL; BL blamed Renault. Headlines such as that in the Sunday Telegraph that shouted, “RENAULT SEETHES AT L’AFFAIRE HONDA”, cannot have helped a politically sensitive situation. The article accompanying the headline did nothing to soothe the situation: “Whatever distaste the BL workforce may have felt on hearing that their chairman, Michael Edwardes, had been talking to Honda, was evidently nothing as compared to the anger with which Renault received the news. Renault, after all had been talking about a liaison with BL long before Honda was on the scene and it seems was under the impression that it was still talking – until it heard last week’s news and assumed the line from BL had gone dead… It is still, so it is said, ‘absolutely furious’ at having been jilted.”
The affair was over… or was it?
One can imagine that there was no way that Renault and BL would ever speak to each other ever again. After all, after becoming Renault’s chairman in 1981, Bernard Hanon was probably the most vociferous in his criticism of the Anglo-Japanese relationship being built up between BL and Honda. In “The Whole Story”, it is explained just how much noise Hanon made over the development of the Rover 800, and how Renault would do everything in its power to stop the car being sold in Europe without being subject to Japanese import quotas. It never happened, and in time the controversy died down.
Time, they say, is a great healer.
Even so, it comes as something of a shock to discover that some twenty-five years later, the two companies could have ended up sharing a more than tenuous link. This time, the deal was to have been struck between MG Rover and Matra over the production of the Matra-built mark three Espace, which had recently been phased out by Renault. When Renault developed their own Espace replacement, Matra looked for a partnership with another car maker and approached Rover (the only major carmaker not to have an MPV in its model portfolio by this time). Matra submitted design and engineering proposals for a Rover MPV. MG Rover conducted negotiations with Matra, as the French company possessed the sole rights to the platform, which they designed and produced for Renault.
According to an informed source, MG Rover were ‘ninety per cent’ of the way to signing a deal with Matra to build a rebadged and lightly revised version of the previous Espace. Technically, it would have been simple for MG Rover to make the car look like its own as, the old Espace understructure was relatively easy to restyle given the fact that the panels were not load bearing. The plan advanced as far as devising an engine strategy, which revolved around the usage of Peugeot diesel engines and the KV6.
The promising plan went sour when MG Rover and Matra could not agree on production volumes. Matra were hoping to achieve something like 100,000 units over five years, whereas MG Rover were being more realistic, by projecting half that. There were also the potential implications of using the KV6 engine, as it was more expensive than the Renault V6 that had been used in Matra’s own costings. MG Rover were perhaps being pessimistic, but given its patchy European dealer network and non-existent image in some European countries, it paid to err on the side of caution. There was also the important issue of funding: MG Rover were of limited means, and the Matra project would have taken resources away from important future models…
The plan would have not been without merit though, as the previous generation (Matra) Espace was still a mightily competent machine, even at the end of its life. In many ways, it was a superior car to its Renault-designed replacement.
Negotiations between MG Rover and Matra floundered in the Autumn of 2001. Matra, who had been very keen on the deal did try very hard to make it happen, but in the end, the companies could not quite clear the final furlong. This breakdown in the talks resulted in the entire mark three Espace production line was being closed, as no other buyer for the car could be found. Incidentally, the loss of the Renault Avantime (which had been cancelled due to disappointing sales volumes) could have had a knock-on effect on the Rover MPV, had the plan had gone ahead.