Based largely on an interview with Jan Thoenes – formerly responsible for British Leyland International’s sales to European ‘Distributor’ markets, within Leyland International – Chris Cowin tells the oft-tragic story of the company’s failure to crack the European market.
British Leyland International: the winner that never was
I recently had the chance to interview Jan Thoenes, somebody closely involved with the international activities of British Leyland (in Europe) in the 1970s. Jan, who is of Belgian origin, first joined BMC in 1965 working at Cowley and later Longbridge.
In 1969, he joined the staff of the British Leyland Europe Office located in Lausanne, Switzerland and was headed up by Filmer Paradise (initially recruited by BMC from Ford Italia in 1967). Jan Thones remained in this office after Paradise was transferred to the UK, Lausanne now being headed by another ex-Ford man, Dick Bergesen.
In the period following 1970 there was much turmoil in the arrangements surrounding the supply of cars to customers in Europe. When originally created in 1968 the Overseas Division of BLMC (headed by the aggressive Jack Plane) had not included Europe or North America in its scope, but a reorganization in 1970 saw the new British Leyland International (BLI) formed, responsible for all sales outside the UK.
Directing Europe from Berkeley Square
In mid-1971, BLI (still headed by Plane) ‘centralised’ much of its activity on BLMC’s Berkeley Square HQ in London. These changes resulted in the disbanding of the experienced Lausanne team, and the loss of direct contact between British Leyland’s car divisions and national importers.
From now on all transactions passed through British Leyland International, which in 1972 was structured into three divisions: Europe, North America and Overseas (i.e.. Rest of the World). A similar system was perpetuated following the Ryder Report, with Leyland International (headed from 1975 by David Andrews) acting as a ‘middle man’ between the vehicle plants and customers.
During this entire period British Leyland was involved in the restructuring of its European distribution, a gargantuan exercise which involved not only rationalising the patchwork of importers which had been inherited in each country from the days prior to the formation of BLMC, but also attempting to gain full control of distribution by establishing company-owned National Sales Companies (NSCs).
Taking control of the independents
Thirteen such NSCs (for example, BL Norge in Norway) had been created by 1972 resulting in a Europe consisting of NSC and non-NSC markets where independent distributors remained. The buy-outs of independent distributors consumed a lot of money, a commodity always in short supply in a cash-strapped British Leyland.
The late (1976) buyout of German importer Bruggemann for example cost £1.6 million, which would have paid for a minor product facelift in those days, one reason a lot of markets remained in the control of distributors in which BL typically held a minority stake.
I’ve attempted to cover a lot of this history in my book Export Drive, but the interview with Jan Thoenes (JT) provided many additional nuggets of information.
Jan Thoenes: in at the deep end in Belgium
JT was intricately involved in much of the above. As a Belgian, he played a role in the establishment of BL Belgium, the Belgian NSC, in the early 1970s. This involved terminating previous importers, some with a long history of collaboration with British companies (Imperia with Standard-Triumph, Bourgeois with Jaguar).
New offices for BL Belgium opened in Malines/Mechelen (adjoining the existing Triumph assembly plant). The Managing Director was John Morgan in the early 1970s, with a healthy 7.5% market share boosted in part by BL’s status as a ‘domestic’ producer due to assembly at Seneffe and Malines. The 1300GT especially was a hit in Belgium it seems.
Luxembourg once had an importer (Weber) independent of Belgium, but this operation was absorbed into BL Belgium. This was a market where Austin (imported by SOGIDA) had traditionally sold better than the Nuffield models, in contrast to the Netherlands where Morris (handled by Molenaars) was a better-known brand.
British Leyland International: Getting the brand mix right?
The inability to identify a lead volume car brand for Europe (a legacy of BMC’s rather laissez-faire approach to distribution historically) was one of many problems BLMC were grappling with in the early 1970s. Wolseley had all but disappeared from most European markets (it lingered on in the Netherlands until around 1972) and, of course, Riley was dropped globally in 1969.
In 1975, JT was transferred to the UK to work for British Leyland International in the new corporate headquarters on Marylebone Road (Leyland House, formerly the Burmah-Castrol building) which BLMC moved into in 1973.
Prior to this date BLI had operated partly from Berkeley Square and partly from additional offices in Bowater House, Knightsbridge (now replaced by apartments for millionaires). JT became responsible for the non-NSC (or Distributor) markets in Europe, a list which included Finland, Denmark, Portugal, Greece, Iceland, Switzerland, Israel and the Canary Islands (which were handled separately from Spain).
British Leyland International: from London to Coventry
He continued in this role in the late 1970s when Leyland International moved (not without some upheaval of staff) to Coventry (International House, Bickenhill Lane) around the same time that administration for the domestic market moved to Redditch. During the Leyland Cars era, Bert Lawrence was Director of European Operations for Leyland Cars International.
JT left British Leyland in 1980 to join Nissan in Kenya (where he still lives).
We had quite a wide-ranging discussion from which I’ve pulled out a list of ‘factoids’ rather than try and weave them into a narrative. These points are perhaps best read in conjunction with the existing articles concerning overseas markets on AROnline (Around the World) and they feed in, as already mentioned, to my book Export Drive: BMC & British Leyland Cars in Europe and the world 1945-85 which covers a lot of this ground, and discusses some countries not touched on here such as Germany and Ireland.
British Leyland International: Ford-style consolidation
JT mentions how the early days in the Lausanne office were dominated by a strong ‘Ford ethos’ reflecting the background of senior management. The consolidation of dealer networks was being attempted in this era (initially simply that of BMC, which had been slow to merge the parallel European distribution of Austin and the Nuffield marques pre-dating 1952) but also after 1966 encompassing Jaguar in some instances, and then from 1968 Rover and Triumph also.
Ford had embarked on a major consolidation of its dealer networks across Europe earlier in the 1960s, but, unlike BLMC, had not had to contend with all the different marques, with their contrasting customer profiles. (It’s generally accepted, for example, that a great deal of goodwill, and potential sales, were lost by giving the Jaguar franchise to dealers previously familiar only with Austin/Morris vehicles in this era).
Loyalty to the importer
JT underlines how in many markets customer loyalty was more to the long-standing importer (for example Molenaars in the Netherlands, who had a long history of assembling (until 1969) and distributing BMC vehicles (initially Nuffield)) and that, when these companies were stripped of their franchise, sales suffered.
BL Gouda became a wholly-owned NSC responsible for distribution of BL cars in the Netherlands in 1973. JT also highlighted how the streamlining and rationalizing of BLMC’s dealer networks in the early 1970s provided a golden opportunity for Japanese brands to establish retail networks across Europe. JT feels a big drawback of the NSCs established in the 1970s was a lack of public interface, with staff too remote from customers.
JT believes quite a few cable-change Austin Maxis were assembled at Seneffe. The production records show assembly of the Maxi at Seneffe starting with 1606 units in 1970/71 (which could have included some cable-change cars) and ending in 1974. A situation certainly arose where a lot of cable-change cars had to be off-loaded in Scandinavia prior to introduction of the much-improved Maxi 1750 (and rod gearbox). This gave the Maxi a bad reputation in those markets.
Morris Marina: unloved
Concerning the two big product launches of the early 1970s, JT feels the European organisation was always lukewarm about the Morris Marina but accepting, because it represented incremental volume (BL not having had a credible vehicle of that type before).
It should not be forgotten that the Marina did quite well, in the early 1970s, in markets such as Scandinavia with its price and (apparent) robustness standing in its favour. But these markets were also largely unprotected from Japanese competition, and the Marina was firmly in the crosshairs of rivals such as Datsun and Toyota. Estate sales in Europe appear to have been modest, something JT attributes to the estate market being small.
The 1.8 Estate was offered in markets like Switzerland, Norway and Belgium in the early years, but estates disappear from most price lists by 1976 (when a 1.3 estate, which might have sold better, entered production).
Austin Allegro: disappointing
The Austin Allegro was far more of a disappointment and opportunity missed, for reasons all too familiar. JT specifically mentioned the lack of a hatch as a problem. He also, rather more interestingly, explained that there was a proposal to export the Italian Innocenti Regent version of the Allegro to other European markets (not the UK I believe).
Geoffrey Robinson (MD Leyland Innocenti 1972-74) was apparently pushing hard for this and one can understand why, as the Regent did not meet sales targets in recession-racked Italy during 1974-75. Innocenti exports of Minis (Cooper 1300 and 1001) to other European countries had commenced in 1972 and this would have provided a template.
Exactly how the Regent would have interacted with the Austin Allegro (never sold alongside it in Italy but only from 1976, after the Regent’s demise) is not clear. Perhaps as a sporty/luxury version (the Regent 1300 and 1500 had twin carbs unlike their UK counterparts at that time, and distinctively different interior and exterior trim).
…but not a complete failure
The Regent 1500 would have been more powerful than any AustIn Allegro in most markets (as the Allegro 1750 was generally not offered in Europe). A lavish film made at the time of the Regent’s launch and linking to its Austin cousin (filmed on London’s Regent Street) underlines the aspirations once attached to this model by Leyland Innocenti. In the event, it proved an expensive fiasco, with production ending after 18 months.
It’s too harsh to say Allegro failed completely in Europe (as James May did in a recent programme). It was popular for a while in Belgium, Denmark and the Netherlands (in 1975 coming close to matching the Dutch sales of the Mini), and Seneffe became expert at producing Specials which made the car more appealing.
However, an excellent car would have had potential to transform British Leyland’s position in the European market in the 1970s (and, indeed, the UK, thus acting as a much-needed lifebelt for BLMC as the Golf was for Volkswagen and the 205 later was for Peugeot). Sadly, the Allegro wasn’t such a car, really just treading water in Europe.
The Innocenti question
JT remembers much agonizing in the 1970s over the Innocenti 90/120 hatchback (launched in 1974). He feels this suffered from a not-invented-here syndrome at Longbridge, but repeats many of the valid criticisms of this model. Namely that it was poorly packaged, very expensive to build (employing the complex mechanics of the Mini in full, powertrain and subframes) and that the pretty body was rust-prone (panels were pressed in Italy, not the UK as sometimes thought).
All this counted against its introduction to the UK market, but it was distributed through BL in several continental markets (Germany, Switzerland, Austria, Netherlands, France, Belgium). Not however in other markets such as Scandinavia.
There was a complicated commercial scenario surrounding the 90/120. Although BL had sold Innocenti in 1976 (to De Tomaso) so this was no longer strictly a BL car, it would have suited them to ensure that Innocenti was guaranteed sufficient sales to keep production viable, for the exports of Mini components sent to Italy to underpin the 90/120 were an important part of BL’s export business.
Distributing the car through BL in those six markets helped Innocenti achieve the volume it needed, as did BL’s decision to withhold the classic Mini (which Innocenti stopped building in 1976) from the Italian market until the 1980s (except Clubman estates) thus giving the 90/120 less internal competition (despite the sell-off, Leyland and Innocenti cars were frequently still sold from the same Italian showrooms).
British Leyland in smaller markets
The Canary Islands are an interesting (and often overlooked) market for British cars, and BL sales there warranted an annual visit by JT. There were two distributors, at least by the late 1970s. The Canary Islands were exempt from the high import tariffs applicable to Spain and, as a result, took a high percentage of non-Spanish cars with British cars traditionally doing very well.
Iceland was always a strong market for Land Rover and Range Rover. There was extreme frustration in the 1970s related to supply shortages (no surprise that the Japanese eventually captured a large chunk of this market).
At one point the Icelandic distributor was pleading with British Leyland to increase the list price of these vehicles. This was because the profit margin dealers could make was controlled in percentage terms by law, and with long waiting lists, price increases allowed dealers to make more money while not selling any fewer vehicles.
Erosion in Scandinavia
Finland (like other Scandinavian markets) was one where BL saw its share eroded away from one of some strength at the start of the 1970s to effective withdrawal (of the mainstream car models) by the end of the decade.
Along with all the well-rehearsed problems of BL in the era, Scandinavian markets were marked by unfettered Japanese competition (because there was no domestic industry to protect (except SAAB/Volvo) so no protectionism, and (partly related to the previous point) low prevailing pre-tax price levels which made it very hard for BL to make money, especially after the pound started appreciating from 1978 onwards.
In Finland BL’s importer was SISU, also known as a truck builder. This was a strength as the Sherpa fitted well with the truck range and, by the end of the 1970s, the Sherpa was the main product being sold by BL in Finland, where they were popular with the Post Office.
SISU declared it was no longer interested in distributing BL cars in 1979 (the price rises forced by the appreciation of sterling rendered them uncompetitive and, even if BL had held prices down for strategic reasons, that may have led to charges of dumping (selling below cost)). Finland had traditionally taken a lot of excess stock from elsewhere in Europe, being a very price focused market. SISU Managing Director Raul Falin would be killed tragically while competing in the 1000 Lakes Rally.
Swedish spec issues
Sweden offered many parallels to Finland and was expensive to serve because cars for Sweden had a unique specification (featuring headlight wash/wipe, head restraints etc.) which prevented it from taking cars originally destined for other markets, or from passing on excess stocks. In Sweden, as in Norway, British Leyland sales had almost completely ceased by the end of the 1970s, with Michael Edwardes making a deliberate decision to exit these markets to stem losses.
Denmark had traditionally provided big volumes for British Leyland (which was market leader with around 20% market share in the early 1970s) but, in the view of JT, had never been a profitable market. This can be attributed to the tough negotiating skills of the importer and distributor DOMI (which assumed responsibility for all BLMC marques in 1972) combined with the fact that cars in Denmark were subject to very high sales taxes calculated as a percentage of the pre-tax price.
As a result, pre-tax prices were cut to the bone (and the specifications of Danish market cars were often rather spartan) while profit margins were thin.
Denmark’s unique model requirements
This was the kind of export market where having a presence only made sense because the additional volumes aided the manufacturer’s economies of scale (on cars like the 1100/1300) and reduced unit costs. So, due to Danish volume, every 1100/1300 built in the UK was a little cheaper to build, and thus a little more profitable for BL.
Denmark’s appetite for bargain basement cars resulted in it being the destination for quite a lot of excess stock and price-leader vehicles, notably the 998cc Austin de Luxe (ADO16) exported from Leyland AUTHI in Spain and sold very cheaply. It was bad luck that the continental European market where BL did best in share terms (by quite a margin) was also one where it was almost impossible to make money.
Grecian difficulties for British Leyland International
Greece appears to be a market where there are many tales (still to be told). Suffice to say that Greece was the focus of a ‘slush fund scandal’ that rocked BL in the 1970s, and was a market where unconventional financial arrangements prevailed. The BL importer in the 1970s Beomax (MB), had developed from a concern that refurbished Mercedes-Benz trucks abandoned by the Germans after the war. A separate company imported Triumph and Jaguar.
A particular success for BL in the (very small) Greek market of the 1970s was the Marina pick-up which benefited from an import restriction on Japanese pick-ups. There was thus little competition and with such vehicles popular, around 80 Marina pick-ups a month were sold, which had a knock-on benefit in helping car sales.
Other stories from Greece worthy of further study include the supply of Mini Mokes from Australia in the 1970s, and the niche success of the Austin Montego 1.3 saloon in the ‘80s (big car + small engine = low tax). The same calculation probably explains why Greece imported the Austin Victoria from Leyland AUTHI in the early 1970s, being possibly the only export market to take this model beyond Spain.
The unlikely success: Portugal
Portugal was a country where BMC/BL had traditionally done well (and had an assembly plant) but had been savaged by Japanese competition very early on. It’s not generally realized that Japanese cars had captured 25% of the Portuguese market by 1973.
In this context, the revolution in Portugal of 1974 was apparently seen as something of an opportunity with the Managing Director of BL Portugal, Carlos Ghia, flying to London and declaring ‘Now is the time to support us’. Japanese imports were indeed sharply restricted by the new regime, but a very weak economy resulted in Portugal remaining a backwater for BL for most of the 1970s.
The Swiss Finish
Switzerland made much of the Swiss Finish programme conceived by importer Emil Frey AG. This was designed to counter the reputation for poor quality that afflicted BL cars in the 1970s and supposedly involved cars for Swiss customers being extensively reworked once they entered the country.
They typically bore a Swiss Finish badge or sticker once on the road. JT feels this procedure (something similar happened in Denmark) was a little over-hyped, with the extent of re-working often equivalent to simply a thorough Pre-Delivery Inspection. Longbridge/BL HQ was apparently not happy about the publicity given to such rectification programmes, but as Switzerland (and Denmark) were independent distributors, powerless to stop it.
Swiss sales volumes (which as elsewhere dwindled depressingly as the 1970s progressed) had once been heavily dependent on the Mini (many of which were supplied to Switzerland from AUTHI). The Rover SD1 was a car which found favour in the Swiss market but, there as elsewhere, it was held back by serious quality glitches and supply hold-ups related to strikes.
The 2600 model would have done better if introduced with less delay JT feels. (The 2300 was not offered in Switzerland). In Switzerland, as elsewhere, there was a tendency for BL to try and ‘bundle” cars (i.e. force the distributor to take five Marinas for each Rover) which did a lot of harm in the longterm.
The Swiss distributor handled other makes (Subaru) which insulated it from the problems of BL but also divided management attention and sales efforts. The same applied in other countries where BL had not created a wholly-owned NSC.
Rover-Triumph crippled by strikes
As a general point, JT feels the extent to which strikes damaged Rover and Triumph in the European market cannot be over-emphasized. The Austin-Morris range was protected to a degree by assembly at Seneffe, which hardly ever suffered a strike.
Triumph he singles out as being very chaotic. Largely due to strikes, serious problems of backorders, or the disappearance of cars in the system tended to occur and there was a resistance in the network to place further orders. Until 1975 many Triumph cars for Europe had been assembled at Malines/Mechelen, but the cessation of this in favour of direct supply may have made matters worse.
Meanwhile, Land Rover supplied many markets with vehicles in kit form (CKD) with these kits often proving to be incomplete on arrival.
The principal players at British Leyland International
Among other memories JT shared of his time with BL was meeting the Ryder team (in 1975) at the time they were collecting submissions for their report, attending in the company of Percy Plant (later to head Jaguar-Rover-Triumph under Michael Edwardes). JT believes Donald Stokes, in this period (1974/75) was as keen to push Leyland as a brand (e.g. Leyland Mini) as Ryder was.
He had dealings with Geoffrey Robinson at Jaguar whom he found very abrasive, and keen to deal with national distributors directly. (Under the BLI system, all transactions had to pass through that body).
He made monthly visits to most markets, handling issues such as order processing and corporate identity changes (of which, he feels, there were far too many). If the countries required advertising support, he would help them liaise with the BLI advertising team.
Trying to build a better European presence
Overall, he emphasizes how much of the work done in the mid-1970s in trying to build up BL’s European position from a low base was undermined by the subsequent sharp appreciation of sterling – a frequent bugbear of British car exporting, which was perhaps never so severe a problem as in 1978-81, as explained below.
Although the specialist brands were to an extent insulated from sterling’s appreciation, it became virtually impossible to make money with the Austin-Morris range on the continent during this period, which helps explain why sales volumes in Europe by the early 1980s were a shadow of those achieved a decade before, as shown on the table below.
It took a very long time for British Leyland (or its successor companies) to reap the benefits from EEC membership which had been eagerly anticipated when BLMC was lobbying hard in favour of joining in the early 1970s, for reasons that could not all have been anticipated. In 1971 approx. 250,000 BLMC cars were sold in continental Europe, up from 150,000 in 1967 (by the constituent companies of BLMC), a surge helped by the shock devaluation of the pound in late 1967 (before 1972 exchange rates were fixed rather than floating) and by a booming European market. If that trend had continued, then British Leyland would have ended the decade in a much stronger position than it did.
Short supply when cars were needed the most
However, 1972 and 1973 saw cars, in short supply anyway due to frequent strikes, diverted to the home market, gripped by the runaway Barber boom, and European volumes fell back to just over 200,000 for 1973 (including, in each case, cars assembled at Seneffe and Innocenti from UK supplied kits, as well as the Spanish manufactured AUTHI models (43,000 built in 1973) which did not count towards BLMC’s UK car production or export tally).
Late 1973 saw boom turn to bust across Europe in the wake of the October oil price hike and, although in 1974 and 1975, British Leyland had no shortage of cars to sell in Europe, the market no longer wanted them. Nearly every continental car market contracted below the 1973 level in this period while in the producer nations of France, Italy and Germany fierce discounting by the likes of Renault and FIAT squeezed more marginal players like British Leyland hard.
It didn’t help that the Mini was aging, the Allegro was underwhelming, the Japanese were on the march, and British Leyland’s own continental production in Spain and Italy had plunged into crisis.
Then the crash came…
1974 sales volume for continental Europe was 170,000 and 1975 just 150,000. It seemed the mushrooming of sales predicted because of EEC entry (in January 1973) was an illusion. But there was still a belief it might come about, something that underpinned the volume predictions in the 1975 Ryder Report. (It should be remembered the EEC only had nine members in this period including the UK, but EEC export markets accounted for around four fifths of total European export volume for BL).
For a period, it did seem the tide was turning. Despite the (almost) total loss of any sales volume in Spain following AUTHI’s collapse in 1975, British Leyland car exports from the UK to Europe (including kits destined for the now independent Innocenti) came close to the 200,000 mark in 1977. EEC import tariffs were reduced over a transition phase, so it was not until 1977 that British Leyland enjoyed the full benefits of tariff-free access to the EEC market.
That, and a sharp fall in the value of the pound in 1976, allowed price reductions (a rare thing in the inflationary1970s) which saw BL gaining share in markets like the Netherlands. The Austin-Morris cars were approaching something of a value brand positioning, in which, despite criticisms of design and build quality, they were gaining volume, helped as well by general expansion of the market across Europe as recession gave way to growth.
Currency fluctuations start to hurt BL
However, (which is where this passage started) a sharp appreciation of the pound commencing in 1978, fuelled by oil reserves coming on tap then a Conservative election victory, brought an end to BL’s European comeback. As already stated, the company simply pulled out of Scandinavian markets to stem losses.
Prices were increased elsewhere while, by late 1970s, BL’s aging product range was taking its toll. European sales volume fell back to just 120,000 in 1979 and 99,000 in 1981 (when the exchange rate problem was particularly acute). The strong pound had effectively skewered any hopes of a European comeback.
By 1984, when exchange rates had normalized, the company’s presence in many European markets remained weak, with European sales volume of 83,000 cars largely composed of Metros, Minis and Acclaims for Italy and France (many exported in 1983) where BL had hung on despite losses.
BL recovery comes too late
But it should be acknowledged that things picked up after the nadir of 1984. BL global car exports from the UK that year were down sharply from 1983’s 88,000 to a dismal 70,000 (in both cases excluding Jaguar). However, they then started to climb reaching 165,000 (by Rover Group) in 1991.
The principal factor in that renaissance was an expansion in sales to Europe, with the models developed in joint venture with Honda to the fore. Membership of the now enlarged EEC (Spain and Portugal joined in 1986) was at last bearing fruit. For a period in the 1990s, Rover Group was selling more cars in continental Europe than on the home market, something that had never been the case before.
The table below indicates sales volume by British Leyland/BL Cars in Europe (excluding the UK) for selected years, divided into EEC and other markets to arrive at the European total. Jaguar is excluded for 1981 and 1984. Greece joined the EEC in 1981, but that’s ignored for these purposes.