Archive : 50 years ago today – Leyland closes on Rover

On 25 February 1967, it looked as if the super-successful Leyland manufacturing group was homing-in on its next purchase – the Rover Car Company. This was the mood of the time: expand or merge to survive, and Donald Stokes’ Leyland was certainly confident that it would prosper in the coming years.

Here’s how the media reported the lead up to the merger back then.

Leyland’s £16 million expansion for 1967

The Leyland Motor Corporation is pressing ahead with its £60m five-year expansion plan, first announced in July 1965. In spite of difficulties in several markets the group intends to spend £16m on expansion this year.

Describing the expenditure plans as ‘an act of faith’, Sir William Black, the Chairman, told the annual meeting yesterday: ‘An upsurge in demand must come. and we are determined to be equipped to take advantage of it.’

Sir William underlined the importance of keeping down production costs if the group was not to be priced out of world markets. Of the proposed merger with Rover, the Chairman announced that proxy votes totalling eight million for and only 5000 against the merger had been received from Leyland shareholders, and he expected 99% of Rover shareholders to vote for it.

Leyland-Rover merger ‘a certainty’

The £25 million takeover of the Rover Motor Company by Leyland Motor Corporation now seems certain to be completed within the next month. Leyland shareholders , at their Annual General Meeting yesterday, approved the offer for the Rover shares, which involves a share transfer putting a value of 13s 9d on each 5s ordinary Rover share.

Sir William said: ‘It is a very logical development , and one that will be of dear advantage to both organisations.’

Submitting his report to shareholders, which showed that, for the year which ended on 30 September, Leyland made a profit, after tax, of almost £9.5m. Sir William said that the year had been an exceptionally difficult one in overseas markets, and that most of these difficulties persisted.

USA difficulties mean strength in numbers needed

He added: ‘In the USA, where Triumph cars are our main product, new safety regulations are being imposed, together with severe air pollution restrictions. The market for sports cars is being affected by so many of our potential customers being called up for the fighting services.’

Sir William also told the meeting that, in spite of the economic difficulties, Leyland intends to press ahead with expansion and modernisation programmes, which involve capital expenditure of some £60m during the next five years. Of this, £16m will be spent this year, including £5m at the Leyland plants in Lancashire.

He said: ‘International competition in the automobile field has always been very keen, and today , is no exception. On the car side, in particular, it would seem that production capacity of the world has – temporarily at least – outstripped, the demand. Fortunately, this is not yet clear to the same degree in the heavy commercial vehicle field, which is of course , our main operation.’

Bank rate reduction a help

Sir William said at home the recent reduction in the bank rate would help, as Leyland operated largely on borrowed money. In common with the rest of British industry, they were also looking for the time when the freeze would end, or, at least, be relaxed. In particular, he would like to see investment allowances granted on trucks, which were surely ‘tools of Industry’ .

He added: ‘I would emphasise the vital necessity of keeping our production costs down , or we shall be priced out of world markets.’

Sir William also told shareholders that, subject to any change in circumstances beyond the corporation’s control, it was intended to pay the same dividend this year as last year (a final dividend for last year of 5 per cent, payable on 7 March, was approved by the meeting, and there was an interim payment of 2.5% last April.

A push to cut production costs needed

He added: ‘It has not been usual for us to show in advance what our dividend policy was likely to be, but our financial advisers suggested I should make that reference in view of our offer to the Rover shareholders.’

Sir Donald Stokes (above), Deputy Chairman and Managing Director, also emphasised yesterday the need to cut production costs. He said the industry was now meeting severe competition from the Japanese in all foreign markets for small cars.

He said: ‘They are not making better cars than we are, but they are making them more cheaply. We are, therefore, having to cut our margins to meet this competition and, if this goes on, we will not have enough money available to finance new business. It is, therefore, vital to cut production costs in every possible way.’

Keith Adams


  1. Sad to say this merger led to the death of Triumph and the closure of Canley and Speke, as British Leyland decided to concentrate its resources on Rover, and Triumph was reduced from producing a successful range of small sporting saloons, sports cars and executive cars to assembling a Honda in the end. A real shame as Triumph was like a British BMW and its sports cars were very popular in America.

    • Triumph brought their demise upon themselves, by designing the ridiculously unreliable slant four and V8 engines, just as the Japanese were coming into the market. The Dolomite was also kept in production far too long, and was expensive to build – BL also missed the opportunity to cut costs by sharing the Dolomite platform with the Marina. Triumph cars looked nice in the brochure, but didn’t work nearly as well on the road; and between high production costs and sky high warranty costs, couldn’t make a profit.

  2. An interesting comment which I don’t think I’ve ever seen mentioned anywhere before, to explain the decline in the sports car market in the 60s……….”The market for sports cars is being affected by so many of our potential customers being called up for the fighting services.”. In other words, the young Americans who might buy Triumphs and MGs were going to Viet Nam.

    • It’s a thought but at the same time the introduction of the muscle cars such as the Camaro/Firebird/Mustang must have eaten into the younger end of the market. Also the Triumph sports cars (as were also the BMC sports cars) were in 1967 a fairly aging product and the lack of genuinely new product was required in a market segment where novelty is an important factor. Both “new” sports cars introduced in that year the MGC & TR5/250 were existing models with straight six engines dropped into them. This lack of any meaningful investment in new product led to it’s prolonged demise and the introduction in 1970 of the Datsun 240Z certainly ate into British sports car exports from then on.

    • Only one in three young men were drafted during Nam, some serving at home or in Germany, and the other two thirds were exempt either on medical grounds, worked in an essential industry like coal or armaments, or were exempted due being married with children. I’d say Nam was only a small contributing factor to Triumph’s falling sales in the late sixties, the main reason was a small four cylinder British sports car would be no match for a 7 litre Chevy V8.

  3. By the time of the BL/BLMC merger effective 1/1/1968, Detroit was in muscle car production and showing no sign of changing their approach. If the customers wanted a hot factory street rod even if it was a de-tuned street version of the full bore race model, it was available as a factory model that was sold to you through your favorite local dealer. Nothing really changed in America as BMC became BLMC except the Austin/Morris Mini was no longer available(legally anyway)as the car could not comply with the new emissions program and also meet the new safety standards without building it like a tank. The other victim of the merger was the Austin Healey 3000, no longer made and instead the MGC was the successor car.

    If you were driving Detroit iron and you liked it, you stayed with it because gasoline was cheap at about 30 cents a gallon or less and the Detroit cars had plenty of HP with plenty of room for passengers and family. And American cars could not be beat for straight line performance.

    If you took the plunge into a British sports car, that meant you needed a family car in addition to your favorite ride if you had rug rats.

    The huge difference between American iron and British was the road holding ability of better suspensions, rack and pinion steering and better brakes with discs in addition to increased fuel economy and generally more fun especially on roads with curves.

    As long as gas was cheap, which changed in 1973, the American cars did well but were facing increasing competition from Japanese imports which were built better than anything British. When the gas crisis hit America, the economic industrial crisis destroyed whatever was left of BL/BLMC.

  4. I agree with Rick, most American muscle cars were proper four seaters and more practical than a two seater Triumph. Also you could specify air conditioning, stereo systems, automatic transmission and power windows that weren’t available on British cars. Performance tended to be better in a straight line and most V8s were capable of speeds over 120 mph in the pre emissions era. No one was bothered at 12 mpg fuel consumption when petrol was so cheap.
    Things changed in the mid seventies. Emissions controls strangled performance of big V8s and fuel became more expensive and occasionally subject to shortages, as in 1974 and 1979. Buyers who wanted performance and better fuel economy began to look to cars like the Datsun 240 Z and the Toyota Celica.

  5. As there was massive overlap between the Triumph and Rover 2000 models, I wonder what the engineers at the two firms felt?

    I assume when Leyland bought Rover, they had no idea that the merger with BMH merger was on the horizon, I wonder what their plans were for the joint Triumph/Rover car range?

  6. I always considered the Triumph 2000 to be a quieter car than the Rover 2000, and the overdrive made long distance cruising more relaxing. This isn’t to knock the Rover 2000, as it was a very good car in its own right, just the extra two cylinders in the Triumph made it a better drive.
    I often wonder if the Triumph straight six and the E6 from the Princess was used in the Rover SD1, and the six cylinder Rovers badged as Triumphs, that this would make the smaller engined Rover SD1s more reliable and a lot cheaper than developing the Rover straight sixes. Also it would continue Triumph’s presence in the executive market into the eighties.

  7. Sad to say, neither Triumph nor Rover benefited from this merger in the long run, particularly when British Leyland was created the following year and they inherited the slowly declining BMC. In 1967 Triumph had a large following at home and in America for its sports cars, its 2000 saloon was widely praised for its refinement and performance, and the Herald was a competent small car that sold in huge numbers. Rover at the time had an excellent repuation for producing reliable, well equipped and durable cars like the P5 and P6, and the P5 was the favoured car of Prime Ministers and cabinet ministers.
    Sadly ten years later, Triumph was on its way out, with the 2000/2500 being scrapped in favour of six cylinder Rovers, the Dolomite was old fashioned and falling in popularity, while the TR7 sports cars had a disastrous reliability record and was struggling to sell. Also Rover’s new SD1, while a fantastic car to look at and drive, soon developed a reputation for faults and poor rustproofing and the company’s reputation for quality was permanently damaged.

  8. The SD1’s a bitsa between Rover and Triumph, really. My understanding is that the v8 engine and body styling are Rover derived, with the six cylinder engines, manual gearbox and back axle Triumph derived. The suspension, production engineering and (post 1982) 2 litre engines were sort of Leyland joint efforts. It’s not Triumph badged, of course, but there’s a lot of Triumph DNA present. I think the original idea is that the 2.3 and 2.6 engines would be sold in the Triumph 2000 for while and they were certainly tested in Triumph 2000s. Despite the cam wear reputation, they’re quite a nice engine when on song – they don’t like neglect though! I’d love to know if anyone’s ever put one in a Stag.

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