Essay : The decline of BMC – the European dimension – Part One

Carole Nash Classic Insurance Specialists

AROnline‘s resident historian, Ian Nicholls, delves into his extensive archive and investigates the fall of BMC during the 1960s via its European sales…

longbridge

The standard clichéd explanation for the alleged decline of the British Motor Corporation is that, devoid of exciting new models and effective cost controls, BMC’s market share and profits declined to the point at which the Government of the day was convinced that the whole edifice was about to come crashing down and that it had no option other than to broker a hasty merger with the Leyland Motor Corporation in order to save the situation.

In this site’s British Motor Holdings story, I have hopefully debunked some of these myths, and how some of the medicine was wrongly administered. Another cliché is that BMC did not invest as much as its continental rivals to remain competitive. In his excellent book, Export Drive, Chris Cowin has introduced a new theory about the ultimate decline of BMC, and it is one that makes perfect, logical sense, and is so obvious upon reading it.

It also explains why the BMC Mini and ADO16 sold in relatively small numbers in comparison with less advanced continental rivals. Chris Cowin’s basic theory is that the British motor industry banked everything on an early entry to the Common Market, or European Economic Community (EEC), heavily investing in a doubling of production capacity that was never utilised, due to Britain’s aborted attempts to join in both 1963 and 1967.

Britain’s slow entry into the European market

The original EEC consisted of six countries, France, West Germany, Italy, Belgium, the Netherlands and Luxembourg. From 1961 the member countries, comprising some 200 million people, began to reduce internal trade tariffs to enable free trade and easy access to each others markets. However, goods brought in from non-EEC countries were subject to tariffs that were, at first, set by the individual countries and then standardised at 17.5% in 1969.

Britain did become a member of the smaller European Free Trade Association (EFTA), formed in 1960. EFTA comprised the UK, Switzerland, Austria, Portugal, Sweden, Norway and Denmark, with Finland as an associate member. Excluding the UK, this was a market of 60 million, with only Sweden being a major vehicle producer.

The 1960s generation of British cars were perhaps the most competitive the UK ever produced: Mini, BMC 1100, Rover P6, Triumph 2000, Ford Cortina, Land Rover, Jaguar E-type, Jaguar XJ6, the list goes on. However, in continental terms, sales rates of these iconic cars were paltry.

Austin advert

The traditional answer is always to suggest that they were all badly built, badly designed and unsuitable for overseas road conditions. This is palpable nonsense and does not bear close scrutiny. The reality was that they were prevented from competing on price in the larger EEC market by trade tariffs – even Ford of Great Britain, with its impeccably-costed Cortina, calculated they were only just breaking even with exports to EEC countries.

The story starts in November 1959 when the British Motor Corporation announced a three-year plan for the expenditure of £49 million, which would raise the company’s production potential to one million vehicles a year.

In his statement circulated to shareholders with the annual report, Sir Leonard Lord, the BMC Chairman, said that the planned output of 4000 Minis per week had already become insufficient. They were taking steps immediately to double this output to 8000 a week, including an additional range of light commercial vehicles, which it was expected to announce in January 1960.

Building more vehicles – unequally

Austin commercials

Austin commercials should have been key to export growth

‘Currently we are producing at the rate of 750,000 vehicles per annum,’ said Sir Leonard Lord.
 ‘When extra facilities become progressively available in 18 months to two years, the magical figure of one million units a year will be within our reach. This cannot be done in the existing factories and it will mean new sites, new buildings, and a fresh approach to the problems of production and automation.’

This resulted in an expansion of the Longbridge site and the construction of Car Assembly Building 2 (CAB2), which began producing its first cars in September 1962. The main beneficiary was the new Austin derivative of the best-selling BMC 1100.

macmillan

However, Prime Minister Harold Macmillan’s (right) Conservative Government also expected the motor industry to solve social problems and BMC, like other UK manufacturers, was forced to expand in areas of high unemployment. In BMC’s case, it was forced to move tractor and truck production from the Midlands to Bathgate in Scotland, a plant that was always afflicted with chronic industrial relations.

Quite simply the Government refused to grant permission for manufacturers to build new factories in the vicinity of their existing plants. Ford was forced to go to Halewood, Vauxhall went to Ellesmere Port, and Standard-Triumph went to Speke, all on Merseyside. Rover managed to circumvent these strictures and cleared space on its Solihull site to build the P6 manufacturing block.

Quite clearly all these manufacturers expected an insatiable demand for their products. But who was going to buy all these cars?

Boom, not bust

In 1960 Britain produced 1,354,000 cars, but the domestic market only took 805,000 units. Of its major European competitors, only West Germany produced more cars –1,817,000 to be precise.

BMC alone produced 585,096 cars, although some of these were made overseas in its Commonwealth factories. Harold Macmillan’s ‘Wind of Change’ speech in February 1960 signalled the reality that the British Empire was now in decline, and Britain had to find a new role in the world. Harold Macmillan deduced that Britain now had to look to Europe. Macmillan was involved in the formation of EFTA, and belatedly applied for Britain to join the larger EEC.

Clearly, British industry saw the UK’s application as a formality, hence the massive investment in increasing motor industry capacity. With a new generation of exciting cars coming on stream, how could Britain fail to sell, sell, sell.

However, on 29 January 1963, President Charles de Gaulle vetoed Britain’s application to join the EEC. For the British motor industry, this was a catastrophe. This is not the place to go into why de Gaulle vetoed Britain, but he was to do the French motor industry an enormous favour, by effectively locking out of EEC markets a generation of innovative British cars.

austin_mini_4

Mini was more expensive in Europe than its economy-car rivals

The pride of the British motor industry was the Mini, which doubled up as a budget car and rally winner – except that, in EEC markets, once the import tariffs had been added, it wasn’t a budget car at all. In West Germany, in 1967 a Mini 850 cost 4980DM, while a Volkswagen Beetle cost 4485DM.

In France a Mini 850 cost 7000FF, and an ADO16 cost 10,000FF – in comparison, a Renault 4 cost 5000FF. The Mini was fashionable in Paris, but as a form of mass transportation, it was a non-starter in EEC countries.

The Mini may have been the car of the decade in the view of many British pundits, but its 1960s UK success was not replicated in the EEC, because it was not priced competitively.

BMC manufactured 858,000 vehicles in the 1963-’64 financial year and made a pre-tax profit of £31,405,496 according to the yearly report which George Harriman, the Chairman and Managing Director sent to shareholders. This included 730,862 cars, which equated to a profit of £36.60 per vehicle.

ford_cortina_1600e_4-door_saloon

Ford cashed in with the Cortina by concentrating on the home market

This was as good as it got for BMC, which was now dependent on the domestic market and EFTA for its sales. Both the Mini and 1100 have been criticised for being to complex and expensive to build in comparison with the Ford Cortina, particularly in the 1966-’68 period, with former Ford and British Leyland executive John Barber being convinced that the Mini did not make a profit for its first nine years.

However, Chris Cowin’s analysis of BMC’s accounts suggests that, when volume of these cars exceeded 200,000 annually, there was plenty of profit to be made. Mini production exceeded 200,000 between 1962-’77. ADO16 production exceeded 200,000 from 1964-’66 and 1968-’70.

Automotive analysts remain obsessed with the Ford Cortina’s performance in 1966-’68. However, what must be remembered is that BMC’s wobble in 1966-’67 occurred because of the July 1966 credit squeeze. The same politicians that were urging BMC to focus on export markets were also the same ones who held the key to gaining access to the lucrative EEC market.

Volumes that couldn’t be attained

The BMC front-wheel-drive range depended on high volume to be profitable, high volume that could only be attained by Britain gaining membership of the EEC. In a sense, by 1967 BMC and Ford focused on different markets. BMC, expecting entry to EEC markets, had focussed on high technology front-wheel-drive cars. Writers like Bill Boddy had criticised BMC for producing boring mechanical stodge in the 1950s, in comparison with its continental rivals. BMC had responded to the challenge.

Ford of Great Britain, on the other hand, had no option but to concentrate on the domestic market and EFTA countries. EEC entry in the 1960s would not have resulted in export opportunities for Dagenham and Halewood-built cars, as this was the domain of Ford’s other European subsidiaries and would be seen as trespassing.

The concentration on the UK market would result in the cost-controlled Ford Cortina of 1962, aimed at fleet buyers. Because Ford defined that market sector, it was always one step ahead of the opposition, but their dependence on the domestic market was revealed when they barely made a profit in 1967. However, because Ford made money out of selling lower technology cars to fleet buyers, its other UK-based rivals followed suit and developed their own Cortina clones – such as the Morris Marina and Hillman Avenger. This was where the profit was.

Morris 1800

The Morris 1800 could have sold more overseas without European import tariffs

Even the BMC 1800 ‘Landcrab’ could have been more successful, had it been price-competitive in EEC countries. Once its glitches had been sorted out, it was the kind of car that could have appealed to Continental buyers – a sort of British Citroen DS, with its Hydrolastic suspension. Instead, it became dependent on EFTA and the UK market where it was seen as overpriced in comparison with the Cortina. The ADO17 is now seen as a mistake, but in 1965 it was voted ‘European Car of the Year.’

Again the Austin Maxi is another car that might have sold better had it been price-competitive in the EEC. Like the 1800, it was dependent on EFTA and the UK market, and was seen as an unreliable Cortina rival.

The immediate solution was to set up satellite plants in EEC countries to assemble BMC vehicles, using CKD kits or to make arrangements with local firms to assemble cars under licence. The best known satellite plant was Seneffe in Belgium, which produced Minis between 1965-’81. BMC gained access to the Italian market by doing a deal with Innocenti to build cars in Milan but, even so, CKD kits were subject to some duty.

Seneffe_11

Building cars at overseas factories, such as Seneffe, alleviated the imbalance

The effects of being locked out of the EEC car market could be seen by 1970. In a decade French car production had increased by 109%, West Germany by 94% and Italy by 189%. In contrast, Britain – dependent on a stagnant domestic market – saw only a 21% increase in production. Most of that extra capacity, installed at great cost earlier in the 1960s, was simply never utilised.

In 1970 imports had a 14.3% market share in Britain, which seemed horrifying enough, but imports in France were 19.8%, West Germany 22.5% and Italy 31.1%. It would be 1974/75 before imports reached Italian levels in Britain. Between 1960 and 1970 British car sales had increased 34%, French by 20%, West German by 117% and Italian by 158%.

Better late than never: Britain joins the EEC

In 1971 the Conservative Government of Edward Heath at last succeeded in gaining entry to the EEC, which came to pass in January 1973, and only after President de Gaulle had left office in 1969. For the British motor industry, EEC entry was a decade too late. A decade of inadequate profits, resulting in low re-investment in plant and machinery.

BMC had banked everything on early EEC entry to exploit the design genius of Alec Issigonis and had drawn a blank. A dependence on the home market had seen them fall into the hands of Leyland and Alec Issigonis was sidelined. Britain’s last year outside the EEC, 1972 saw UK car production peak at 1,921,000.

This was fuelled by and large by the ‘Barber Boom’, as the Heath Government desperately tried to boost the economy. Car sales in 1972 also revealed the effect of a decade of isolation from the EEC. While most of the big European manufacturers had high technology front-wheel-drive cars either on the market or in the pipeline, most of the best-selling British cars were conservatively engineered rear-wheel-drive vehicles aimed at the unique to Britain fleet market, because that was where the money was.

Austin_Allegro

The Austin Allegro was too underdeveloped to compete in effectively in the 1970s

The first decade of EEC membership was a disaster for the British motor industry. British Leyland was cash strapped, so cars like the Austin Allegro and 18-22/Princess were hopelessly underdeveloped, and Britain already had a reputation for strikes and poor build quality. The Austin Allegro was billed as ‘British Leyland’s car for Europe’, launched as it was, five months after Britain’s EEC entry – except the Allegro catastrophically failed to sell in anything like the quantities of its illustrious ADO16 predecessor, even to its home market. It was the wrong car at the right time.

BMC had been unable to exploit the Mini and 1100 by selling at a competitive price in the EEC and that had given rival European manufacturers a breathing space to develop and improve on the Issigonis formula.

The Fiat 128 of 1969 was the first significant car out of the block, followed by the Fiat 127 in 1971, the Renault 5 in 1972 and the Volkswagen Golf of 1974. Alec Issigonis may have been one of the greatest car designers who ever lived, but others reaped the benefit of his innovation. ADO16 production had peaked in the sixties at 7000 a week. By 1975 Volkswagen were producing the Golf at 10,000 a week, while weekly Allegro production at Longbridge was down to 2000.

It wasn’t just BL that was struggling…

The situation for Ford of Great Britain and Vauxhall was equally dire. Many EFTA countries had joined the EEC at the same time as Britain and were soon supplied with new cars from Ford and General Motors’ European plants instead of their British factories. Ford and General Motors in Britain went from being exporters to importers as a way of exploiting growth in the UK market and circumventing industrial action in their British factories.

Their UK plants became superfluous and marginalized. By 1983 half of all Fords sold in Britain were continental imports. The situation was even worse with General Motors. Two thirds of all Vauxhalls sold in Britain were imports.

The divorce in design ethos between Britain and the Continent is emphasised by the fact that Ford of Great Britain wanted the Escort MkIII to be rear wheel drive to appeal to the conservative fleet buyers, who intrinsically believed that front wheel drive was unreliable. This was a luxury that even the mighty Ford could not budget for, and front wheel drive was foisted on Dagenham.

By now the design offices of Ford and Vauxhall had been merged with their Continental counterparts and Dagenham and Luton had become minor satellites in a pan-European operation. Being importers, Ford and Vauxhall in Britain were likely to become casualties of any rationalisation. Car assembly eventually ceased at Dagenham and Halewood became part of Jaguar Land Rover. Vauxhall ceased car production at Luton, leaving only Ellesmere Port as a reminder of the once substantial American investment in the British car industry.

Game over…

The decline of British Leyland during this period is well documented on this site, but there was one piece of good news for the company during this time. EEC entry in 1973 at last enabled Austin-Morris to sell the Mini at a competitive price. During the 1970s, some 2,438,187 were manufactured, the little car’s best ever decade – of this total, 1,533,825 were built after Britain joined the EEC, many supplied from Seneffe and Innocenti.

The Mini may have been outmoded as a front rank small car by this point in time, but it enabled many European buyers to at last afford one, and create a legacy of goodwill that BMW have been able to exploit.

The period from 1963-’73 was for BMC and later British Leyland, a lost decade in which it was unable to exploit its lead in front-wheel-drive technology, due to its inability to sell to EEC countries at a competitive price. This isolation enabled France, Germany and Italy to surge ahead in an expanding European car market.

By the time the UK joined the EEC in 1973, the window of opportunity had closed, British cars were no longer competitive in technology terms, and as well as already enduring an automotive invasion from the Far East, Britain now had to face an invasion from the Continent.

lc8story_01

By the time the Metro was launched in 1980, it was already over for BL in Europe

 

Keith Adams

Keith Adams

Editor and creator AROnline at AROnline
Created www.austin-rover.co.uk in 2001 and built it up to become the world's foremost reference source for all things BMC, Leyland and Rover Group, before renaming it AROnline in 2007.

Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...

Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.
Keith Adams

53 Comments

  1. Excellent article, reflecting my sentiments on the topic.

    When my father bought his first BMC cars in the 60s these have been really expensive in comparison to local competitors. The Austin 1800 S was roughly as expensive as an Opel Commodore 2.5… The Morris 1100 Mk1 was 1 1/2 times the price of a similar Opel Kadett. But in times before BL the cars had acceptable build quality (matching Opel and Ford, not Mercedes or the Beetle) and were certainly praised for many of their qualities. In the EFTA-countries the price levels were more even and BMC’s modern cars certainly sold a lot better.

    Later prices dropped to a reasonable level, but quality dropped to absolutly miserable levels. This was when we bought a late Austin 1300 MkIII, just as the Allegro was launched. What a horrible car that was – but it was cheaper to buy than the Mk1 8 years before. As sales picked up, the tale of woe also got around, something cars from the UK never really recovered – to this day!

    Fords and Vauxhalls from the UK in the 60s were simply too crude to have any chance on the German market, not counting in any pricing problems. The Escort Mk1 failed to sell in any meaningful number here in Germany mainly for this reason. Ford abandoned their relatively modern FWD small saloons in Germany for the UK led Escort and Cortina MkIII/Taunus range – and paid with a drop in sales. The Marina was offered for a very brief period here in Germany, but was considered to crude – I do actually not know if any Marina was really sold here.

    Interestingly the following weakness of the UK manufacturers together with the traditional choice of a simple car from the private British buyer did a lot to pave the way for the Japanese car industry in Europe. There were plenty of Japanese cars running in Britain when they were still largely unheard of here in Germany.

    • Indeed part of the reason Ford had such a stranglehold on the UK market in the 1970s was that its European range was optimised to meet the requirements of the UK fleet market, to the detriment of sales elsewhere in Europe. Bob Lutz recognised this hence the 1980 FWD Escort and the 1982 Sierra, both cars with more pan-European appeal. In the case of the Sierra especially this strategy sent Ford UK’s market share over a cliff in the early 1980s but resulted in massively better sales than the Taunus/Cortina ever achieved elsewhere in Europe. To all those tempted to vote No in the referendum when it happens, read and digest the above article carefully before you do!

  2. Thank you for your praise.
    Is it possible some of our continental readers could supply comparative pre-1973 prices showing how BMC’s cars stacked up against the opposition?

    • Hello,
      really great site! Hope you think this is helpful: Some prices taken from various issues of German „Hobby Magazin“. Mostly from 1965. Unlike British, French and Italian car makers Opel and German Ford charged around 500 DM for two additional doors on compact and medium sized models. But anyway: With an average income of around 800 DM monthly, 10.000 DM for an Austin 1800 meant quite a sum in 1965. Listed below: the numbers of some authorised dealers in West Germany (1969).

      Opel Admiral (1965): 12.200 DM
      Vauxhall Cresta (1965): 11.485 DM
      Mercedes-Benz 200 (1965): 10.800 DM
      Fiat 2300 6-cyl. (1965): 9.990 DM
      BMW 1800 (1965): 9.985 DM
      Austin 1800 (1965): 9.960 DM
      BMW 1600 4 doors (1965): 9.485 DM
      Glas 1700 (1965): 8.850 DM
      Hillman Super Minx (1962): 8.800 DM
      Ford 20M TS 6 cyl. (1965): 8.740 DM
      Ford 20M 6 cyl. (1965): 7.990 DM
      Morris Oxford (1964): 7.825 DM
      Audi (1965): 7.690 DM
      Simca 1500 (1965): 7.450 DM
      Fiat 1500 (1965): 6.990 DM
      Ford 17M 1500 (1965): 6.990 DM
      VW 1600 TL (1965): 6.690 DM
      Morris 1100 (1965): 6.490 DM
      Autobianchi Primula (1965): 6.290 DM
      Ford 12 M (1965): 5.390 DM
      Opel Kadett (1965, new model): 5.175 DM
      Simca 1000 (1965): 4.775 DM

      The following numbers have been published in 1969 (Rainer Günzler, „Autotests“ Vol. 1-3, Ullstein Verlag.) Dealers / authorised garages in West Germany:

      Volkswagen: 2.300
      Opel: 2.230
      Ford: 1.972
      NSU: 1.450
      Fiat: 1.415
      Renault: 1.324
      Audi: 1.165
      BMW: 1.091
      Peugeot: 664
      BMC: 386
      Daf: 110

      greets from Munich — uwe

      • Excellent post, thanks Uwe!

        This is similar to what I remember. Basically the Morris 1100 Mk1 and Austin 1800 S my parents bought new up to 1970 could easily be classed as luxury cars with prices as seen above. The 1800 S was about the same price as a Citroen ID19 or a Opel Commodore 2500… A Vanden Plas 1100 (yes, there was one Mk1 sold as new in my home town!) was deeply into Mercedes money and would probably have been sitting near the top of the above list.

        • Thanks for the info.
          Perhaps editor Keith could add this data in the former of a table to the main article.

  3. Could BMC have been profitable enough to have avoided the merger with Leyland to create British Leyland had Britain joined the EEC in 1963?

    And regardless if the merger was to still happen or not, how can one be certain that Britain’s EEC entry would have enabled BMC / BL to have enough cash to develop a new competitive generation of cars by the late-60s / early-70s?

    Aside from the Gartrac RWD mk3/4 Escort conversions, never knew Ford UK wanted the mk3 Escort to be RWD as it goes against the overall trend of rivals embracing FWD (though the larger Sierra was itself RWD).

  4. Very interesting reading, plenty of things I didn’t know.

    The level of imports in other European countries are interesting to know.

    I also didn’t know about the Mk3 Escort being considered to continue with RWD, even when a lot of the other major makes already had their “Golf beaters” on the market.

  5. I was not previously aware of this issue – uncompetitive prices in Europe. With all the other problems it’s a wonder the firm survived as long as it did!!

  6. The story about Ford UK wanting the Escort Mk3 to be RWD came from Karl Ludwigshavens introduction to Jonathan Wood’s Issigonis biography.
    Fifty years ago in 1965 Rauno Aaltonen won the European Rally Championship in a Mini Cooper S. It was a fantastic advert for the Mini, but how many would be buyers in EEC countries were put off by the price of even an 850?
    In Britain it was a Mini world. Celebrities owned them, and if they didn’t, were photographed with them. Autocar and Motor magazines each published an annual Mini edition.
    Annual Mini production peaked at 318,475 in 1971, but I suspect that was a figure regularly exceeded by cars such as the Renault 5 and Ford Fiesta.

    • I remember in Niki Lauda’s autobiography he mentions having to buy a Cooper S off a friend’s Dad after he damaged it while “test” driving it. The £1200odd pounds was mostly lent by his gran, which sounds like a lot for a Mini even with the Cooper bells & whistles.

  7. The situation was compounded by BLs capitulation in the commonwealth markets post Ryder Report, the fuel crisis killing demand all over the world and especially in the US, where expensive federalisation of domestic models ate into profit margins and forced BL to drop its ‘World Car’ the Marina from that vast market by 1975.
    European countries have always protected their own interests, and still do. It’s a shame so many still buy vehicles from abroad, UK produced vehicles help pay taxes, NI and corporation tax, that in turn makes this nation wealthier and in turn increases the chance of direct tax cuts.
    At one stage in 1970 BL accounted for 1/5th of Great Britains GDP, had it been able to sell competitively against European vehicles in Europe that figure would have been much higher and perhaps long term the firm might still be with us today.

    • In reply to Marinast – Your statement about “the fuel crisis killing demand all over the world and especially in the US, where expensive federalisation of domestic models ate into profit margins and forced BL to drop its ‘World Car’ the Marina from that vast market by 1975”.

      Be advised that BL in the US was pretty much done by 1972 as that was the last year of the twin carb MGB in the US and the year before the Austin America was withdrawn from the American market.

      Starting in 1972 BL offered the Austin Marina as a replacement for the Austin America and I never saw one anywhere except in the dealer showrooms. They surely must have sold some of them but I’ve not one single memory of seeing any being driven on our roads.

      So there was a vast potential market, yes. But the Marina sales were never a factor in America. By 1973 Honda had started selling their first Civic models here and never looked back. Mechanically the Austin America couldn’t hold a candle to the Civic and from a price point, the Civic won as the cars were equally priced but the Civic was better built and soon gained a solid reputation.

      Nobody could stop the Japanese. The Marina was a poorly designed and planned car and not at all attractive compared to the ADO 16 fwd Issigonis designs.

      1 August 2015 at 8:25 pm

      The situation was compounded by BLs capitulation in the commonwealth markets post Ryder Report, the fuel crisis killing demand all over the world and especially in the US, where expensive federalisation of domestic models ate into profit margins and forced BL to drop its ‘World Car’ the Marina from that vast market by 1975.

  8. A good and persuasive analysis, but BMC had an option to invest either in production capacity (which ended up not being needed) or in retaining it’s technological lead. The Mini and 1100 should have been developed and improved in the early and mid sixties to keep them at the forefront of technology.

    For example the E series was intended to be 1100 1300 in 4 cylinder form and 1700 to 2000 in 6 cylinder form. There was a also a 1 ltr and sub 2 ltr 3 3 cylinder proposed. The mini could have been up sized in the same way the minor was and given these engines. The 1100 similarly upsized. The 1800 with a 1700 and 2000 six. The MGB with 1700 and 2000 ltr 6

  9. The usual reasons given for the terminal decline of British Leyland are the cars themselves, poor quality, terrible labour relations, questionable management. It is evident, however, that politics, world issues also played a significant part.

  10. Leyland gained the upper hand in the merger negotiations with BMH because they had a better export performance, concentrating on non-EEC markets. This resulted in Leyland having a better share price than BMH at the time of the merger.
    John Barber seemed to expect a big boost in sales from Britain’s EEC entry.
    The Rover SD1 plant at Solihull had the capacity to produce 4000 cars per week, whilst far from abandoning the ADO17 concept, BLMC simply replaced it with the more stylish ADO71 18-22/Princess. John Barber was of the view that BLMC only needed a small handout from the government to tide it over its financial difficulties and it would have survived. Unfortunately for him, Tony Benn saw it as a heaven sent opportunity to put in to practice his ideas for worker participation. But for John Barber’s plan to have worked, the 18-22/Princess and Rover SD1 would have had to have been produced to an acceptable quality from the outset, which they were not. Whether this was down to the introduction of the Leyland Cars set up I do not know.
    It is now my considered opinion that there was next to no quality control at Cowley from at least 1975 to 1987 when Graham Day took over the personal running of the Austin Rover operation.

  11. Must admit, apart from my first car being a 1967 MINI (bought in 1975), I never really considered buying another BL/Austin Rover product until 2001 when I bought a Rover HHR 400.

    To me, the cars from rivals such as Ford & Vauxhall – and the German and Japanese entrants to the UK market just looked so much more modern and “trendy”, for want of a better word. It wasnt till the Acclaim, 200/400 then 600 series arrived, that my opinion changed.

  12. What a coincidence! Some days ago I read in Pieldetoro.net (a spanish site) a road test of the Austin Mini 850 by AUTHI, and how late arrived into the spanish market. A major complaint about AUTHI products always was how pricey they were in front of the opposition ( Seat 600 and especially 850, Renault 4, Citroën 2CV6, Dyane and Ami 8, Simca 1000 in the case of the Mini) and of course the arrival of the Seat 127 and Renault 5 were the final nails in the AUTHI coffin.

  13. I see the Hagerty Festival of the Unexceptional was won by a 1978 Belgian built Ford Escort. In the autumn of 1978 Ford UK was strike bound for 2 months, the dispute was the opening round of the winter of discontent, which brought down the Callaghan government. Ford still emerged UK market leaders by a handsome margin, thanks to the policy of importing cars from EEC countries. By doing this Ford UK were able to avoid the collapse in market share that afflicted BL post 1975. The strikers got what they wanted, but in the long term probably helped seal the fate of thousands of jobs at Ford UK as Ford Europe focussed long term on its European plants.

  14. It’s a shame that BL couldn’t make better use of Seneffe to cover for strike action at their British factories.

    I’ve certainly heard of cars from there being brought over to meet demand, though at times the had carpets designed for LHD cars with the thicker matting in the passenger footwell.

  15. I grew up in Switzerland and can well remember the time period covered by the above article. However, even as the exchange rate of the £ declined, list prices of British cars remained high, even in EFTA countries like Switzerland. In 1974, when in Britain as a student, I can recall list prices of BL cars (notably MGs and Range Rovers) being almost 35% below Swiss prices (even allowing for tax). Either BL were trying to overcharge export customers, or the local BL importers were doing so.

    Simultaneously, Japanese brands were starting to make inroads, and not surprisingly, BL’s Swiss importer (Emil Frey) soon teamed up with Toyota.

    In short, while EEC (now EU) membership was one of many issues, even EFTA markets were not targeted in a reasonably aggressive manner.

  16. At the heart of this was a failing of the British Motor Industry to engage with Europe seeing it as an Export market rather than a domestic market, this is reflected in the Wilson Governments aspirations for a “National Motor Company” which led to British Leyland which was in turn driven Lord Stokes ambition to dominate the UK Motor Industry.

    Admittedly we did see the industry respond to growth in the European market to create CKD operations with the likes of Innocenti to overcome the EU barriers, but it appears that investment was minimal because with the UK imminently expected to join Common Market they would become superfluous.

    However particularly in the case of BMC, whose FWD products with their function over form styling was very much suited to the European markets which were predominantly made up of private buyers had aspired to become a European rather than a UK manufacturer, then they may well still be with us as an entity. However this would have required a significant difference in mind set, first rather than collaborating, they should have bought Innocenti from the outset and fully engaged with the Common Markets automotive Industry to source and supply components so that they became not only eligible for the lowest levels of taxation but also helped offset any impact on earnings from exchange rate fluctuations and in the process created a supply chain independent of the increasingly militant UK labour force.

    However I believe not only would this have benefitted BMC, but it would have benefitted the UK industry as a whole, first by breaking the isolationist mind set of politicians, industry and union leaders and forcing UK component manufacturers to raise the quality and sophistication of their products instead of feeling they had a captive market that will buy the “same old rubbish” year after year.

  17. The picture of Harold Macmillan reminds me of a Blackadder quote…

    “About as useful as a cat flap in an elephant house…”

    The reason we didn’t get into the EEC until 1968 was solely and simply a lanky French bloke by the name of De Gaulle, he veto’d anything that moved regarding us coming in and he hated the British so much that it was decided to disguise a British submarine (HMS Seraph, S-Class as I remember) as American so he wouldn’t throw a fit having to travel in it – he saw through it and was “toweringly unamused”. Still, we did sink most of the French Mediterranean fleet.. probably would have been more fun to let the Italians do it…

    I wonder if price is the only problem, what was the spares situation like in Europe (especially for something like a VP 1300)?

    Speaking of which.. replacement manifold heat shield for a 2005 Hyundai Accent (a piece of thin curved metal with three holes in it)… how much do you think? £85 including VAT! I could get one from the US, pay to have it shipped over here, and it’d still be cheaper…

    As far as the EU is concerned we’d be better out, because we’ve never and will never be part of the club, I’d love to see the taxes on British products as opposed to buying from Germany and the like for a buyer inside Europe proper (ie the continent of), whats the betting they’ll be lower. I know for a fact senior directors of German chemical companies throw a fit if you buy from Israeli (Jewish) competitors… (I wont be naming names, because so far as I know the individual is still alive).

    Ironic isnt it? We fought WW1 to stop Germany getting hegemony over Europe, WW2 to stop Germany getting hegemony over Europe… and lookee here ma, Germany has hegemony of Europe. Makes the 20th century look like basically a complete waste of time and effort – even better we’ve got Theresa May(be I was sane once) as Reichsfuhrer Der Justiceministerium, didn’t we win last time? oh wait…

    We weren’t in from the start and we were never going to be, chiefly due to De Gaulle, it would have been better, to paraphrase Red October, if we had not bothered when we had the option. It tied us into a combined economy with a bunch of people who had an entirely different economic standpoint, different requirements and needs, and of whom a fair percentage hated our guts for what ever reason… bar possibly Luxembourg – and even they were in before us…

  18. I read it as ” flat cap in an elephant house ” and wondered what it meant ! A bit old for dyslexia but it seems to be setting in

  19. While amusing,Jemma’s rant is all based on hindsight. No one expected De Gaulle to reject the British application to join the Common Market. After all British membership would have resulted in export opportunities for France itself.
    I won’t enter into debate relating to the current referendum, as the original idea for the EU as discussed in the article was as a free trade area for the mutual benefit of all members.
    But as related above, De Gaulle did the French motor industry an enormous favour by rejecting the British application to join the EU. Between 1960 and 1970 French car sales only rose by 20% but French car production rose by 109%, showing that much of France’s output was being exported.
    And apart from the Citroën DS, were French cars that appealing?
    Some of them were downright quirky in their engineering.
    In my biased opinion the best cars of the 1960’s were British, with the Mini, ADO16 and Rover P6 being the best of the bunch. But they were locked out of the larger EU market and their manufacturers were unable to get an adequate return on their investment. Exciting, innovative and acclaimed cars that never really fulfilled their true potential because of international politics.
    BMC claimed the Mini had cost them £10 million on launch in 1959, a very large amount for the time. Had they been able to sell 300,000 a year for a decade, they might have been able to afford to bring the 9X to production. But as related above, the Mini was an overpriced fashion trinket in the EU countries until 1973.
    Instead BLMC focused it’s precious resources on creating the awful Marina to take on the American owned giants in the fleet market. And let’s be blunt, the 1970’s rep mobiles were truly appalling pieces of engineering that drove private buyers into the arms of the Japanese and European manufacturers.

    • You’re very misinformed. Marina was created as a short term stop-gap, to tide us over until ADO77. It was intended to be in production for around 3 years. Sadly, due to the SD1 fiasco – it’s huge costs, horrible warranty, and poor sales – ADO77 was killed. That meant Marina had to lumber on far longer than it was ever meant to. Blame Spen King and his ‘masterpiece’, not the poor old ADO28.

      • Whilst it was true that the Marina had only a 4 year planned shelf life that was based on it being a simple reskin of existing components.

        However both the investment was greater than expected due to poor condition of the tooling requiring it to be replaced, need to expand production capacity of some of the components such as the Triumph Gear Box and simply needing to regineering the Minor derived underpinnings I have seen it written by one of the engineers that other than the odd rubber bush everything had to redone, so might as well have gone for a new platform.

        End result was the Marina cost more to bring to production than the mainstream product such as the Allegro and Princess and so could never have achieved pay back over a 3 1/2 year production life.

    • If I’m wrong please let me know, but I guess back then high taxes affected cars crossing the Channel in both directions, didn’t they?
      In the foreword of the British cars’ section of German publication “Auto-Modelle – Katalog 1972/73” the author reports that “in 1970 Britain exported 91.000 cars to the EEC (market share: 1,7%) while EEC countries exported 126.000 cars to Britain (market share: 11,6%).”

      In this publication British cars are obviously listed with new “EEC prices”. Absolutely competitive to models of similar (engine) sizes from France and Germany and real bargains compared to a Volvo 144.

      Peugeot 504 (11.450 DM)
      Triumph 2000 Mk II (12.750 DM)
      Mercedes-Benz 200 (13.930 DM)
      Rover 2000 TC (13.990 DM)
      BMW 520 (14.000 DM)
      Saab 99 4-door-saloon (14.110 DM)
      Citroen DS 20 (14.450 DM)
      Volvo 144 E 4-door-saloon (16.600 DM)

      The Rover 2000 was an excellent car, no doubt. It was highly praised in German motor press for its clever framework construction and the excellent rear axle. Only criticism: a rather small boot and limited room for back seat passengers. But for potential German buyers driving dozens of miles to the next BL dealer to get it serviced or fixed properly was not an attractive option. So they preferred the solid but rather conservative Mercedes 200, even though they had to wait several months for delivery.

      • Yes indeed. At that time my father bought another new ADO16 – a Mk3 1300. The (now EEC) price was very competitive, in fact it cost him less than the Morris 1100 Mk1 8 years before. But sadly at this point the quality was at an all time low, whilst it was quite good on the Morris.

        When living close to a good dealership, spares supply was actually very good. They needed to stock large amounts of service items back in these days. And everything else came indeed quickly from the central spares depot. In our town we had up to 4 dealers in the late 60s into the 70s, but that was rather luxurious by German standards.

      • Yes if everything is equal then it would have been a zero gain, but the 60s was a period of Stagnation and Inflation (Stagflation) in the UK whilst the European Economic miracle was taking hold and so the potential of the Common Market was much greater, which was why we were “begging” to join it.

  20. I don’t buy the idea that earlier EEC membership would have brought a massive increase in output from British car factories. Look at list prices in a British 1960s car mag, and you’ll see that ‘Continental’ cars here were significantly dearer at the time than similar-sized British ones. Tariff barriers impeded sales in both directions. Had such barriers not existed, we’d have sold more of our output abroad. But at the same time British producers would have faced a much tougher domestic market in the face of cheaper imports.

    The effect of earlier EEC membership would therefore have been broadly neutral, just as in my opinion it would be broadly neutral now if left the EU and a tariff war ensued. Washington, Burnaston and Swindon would be unable to export as much, but they’d gain more domestic sales.

    A factor clouding Ian’s analysis is that UK prices for all cars, whether home built or imported, were until the last few years higher than prices in mainland Europe. Remember all those personal imports in the 1980s when the scam was discovered? This must have disguised lower efficiency in some British factories at the time. In 1979 I visited a friend in Germany and travelled in the family’s nearly-new Merc W123 230E, which at the time was priced in the UK market at Jaguar level, even though its most logical competitor here would have been a SD1 or mid-range Granada, both of which I seem to recall were about 20-30% cheaper.

    • If all things were equal ie level of car ownership, disposable income, currency, economic growth, duties etc between the Common market and the UK then you would have expected a zero impact when we joined.

      But noting that Britain was in the 60’s in a period of economic stagnation whilst Europe was in a period of strong growth and that the Mini and ADO16 were exactly the sort of forward looking car designs that would appeal to the European markets of that time which lacked the “fleet” component of the domestic market, BMC would had most to gain and so lost most in our delayed entry into the Common Market.

  21. A correction. I meant to say that the list price of the Merc in its home market was on a par with the SD1 or Grananda price in the UK, whereas in the UK the Merc cost as much as an XJ6.

  22. @ Graham, yes the British economy didn’t grow as fast our rivals, where were still recovering from the war in the sixties, but in the sixties there was economic growth almost continuously,, unemployment was 500,000 or less, inflation low and people felt themselves becoming better off every year. In 1960 there were only 6 million cars on the road, by 1969 the figure had almost doubled, and nearly all the cars were supplied by British factories, with cities like Coventry enjoying boom times due to the car industry. It’s possible the car industry could have done a lot better by being in the Common Market, but generally speaking the car industry was in a far better state in the sixties than when we joined in the seventies.
    The main problem, when we joined and the 17 per cent tariff on imported cars and exports to the EEC ended, was instead of there being a huge boom in exports to Europe, the situation was the other way round. Cars like the Austin Allegro were no match for the more stylish and more capable offerings from France and Germany, and as Rover’s reputation for quality slipped away with the SD1, better off buyers switched to more reliable cars from Germany, while exports ironically fell well below pre 1973 levels.

    • Gleen I agree, and you make my point, we were in the 60s falling behind Europe and when we had the advantage of not having to dig ourselvrs out of a pile of rubble we were excluded from this rapidly growing European market. The growth we had in England in the 60s was well below almost all developed economies and even then much of it was (as has since been mostly the case) it was fuelled by borrowing (HP and Government) and devaluation, we were even then paying ourselves more than we earned and why the Wilson Government faced economic collapse.

      We could have done in the 60s what the Japanese, French and Italians did to us in the 70s and the Germans did to us all in the 90s and 00s.

      By time we entered we had the Marina a car that only suited the UK market (even then it had passed its sell by date) and the Allegro and Princess that missed their target markets by a mile or more.

  23. @ Graham, also joining the EEC meant companies like General Motors and Ford could harmonise their designs and imported models no longer faced tariffs( in the sixties Ford of Britain’s cars were significantly different to those made in Germany). Vauxhall started the trend by importing the first generation of Cavaliers from Belgium in 1975, which were Opel Asconas in all but name, and the following year Ford moved production of the Capri and Granada to Germany. Also whenever a major strike occured, as happened at Ford in 1978, the company simply made up the shortfall in production by importing cars from Belgium and Germany. Indeed by the end of the decade, around half of Fords were imported, and Vauxhall’s new Astra model came from Germany, along with the Viceroy and Royale, while Chrysler/ Talbot initially imported its Horizon from France.

    • I don’t think the Common Market was major driver behind Ford harmonising their European range.

      The original Cortina came about because of a threat from the management to put the German designed Taunus into the UK.

      By 1971 the Cortina and Taunus were essentially the same car.

      • I didn’t know that about the Cortina, I had assumed the main motivation was to replace the under-performing Classic with something better.

      • Indeed, and the 1971 Taunus was quite a retrograde step for Ford Germany: It was larger, but a not too well sorted RWD with live axle compared to compact FWD Taunus that were popular before…. Then the Escort entered the market and was considered nasty and primitive from day one – well outside of the UK that is…

        • Was there any proposals by Ford of Germany to continue with the FWD platform / componentry in some form or another (perhaps as a sub-Taunus or sub-Escort car)?

          Also kind of surprised that the FWD Taunus made do with the V4 instead of the Kent / Crossflow engines, even though the V4 engine was part of the original Ford Cardinal project.

          Interesting that the Escort was considered nasty and primitive outside of the UK.

          • MK1 & 2 Escorts were nasty and primitive with poor fuel economy to boot. However by the late 1970’s they could very easily sell because of how bad BL’s products had become.

  24. @ Nate, I was in France in 1980 and 1983 and Fords were hardly ever seen, except a few one British plates on holiday. The French considered the cars to be unsophisticated and hard riding compared with their own models. Ford only seemed to do well in countries where they had factories, and visiting Germany in 1988, German built Fords were reasonably common, although Volkswagens seemed more popular.

  25. Ford played the “keep it simple” card with the RWD Escorts, & managed to made 4 Million made so they must have done fairly well outside the UK.

    On my 2 visits to France in 1989 & 1993 I didn’t notice the level of Fords on he road to be low enough to notice.

  26. Just been ploughing through some period news articles on the austinmemories.com website (a great way of putting some criticisms of BMC in a true perspective) and found one from June 1961 with press speculation on BMC buying Borgward as a way to get a factory presence within the Common Market, so it shows that this was being considered within the UK industry as a significant issue/opportunity very early in the 1960’s.

  27. Until 1973, when there was a 17% tariff on cars imported from the EU, British manufacturers had nearly 90 per cent of the market. There was a cult interest in Beetles and a following for luxury marques like Mercedes among the wealthy, but nearly everyone bought British in the years before we joined the EEC. Then once the tariff was removed, the floodgates opened to marques like Renault, Fiat, Volkswagen and Audis, whose cars were considered more desirable and stylish than British cars. Also the end of EU tariffs and a move to harmonise designs of Ford and General Motors cars made it easy to import cars from continental factories.
    I wonder had we decided not to press on with EEC membership and stayed outside, if British Leyland wouldn’t have suffered such a nosedive in fortunes as they’d have been protected by tariffs. However, it’s likely the growing popularity of Japanese marques and EFTA brands like SAAB and Volvo could have hit the company, although not as severely as being exposed to the might of the French, German and Italian car industry as well as Japan and Sweden.

    • I would just see the argument the other way round: The EEC market itself is so much bigger than the UK market, that the possible gain for the UK manufacturers was (and is!) much larger than the (little) gain the continental makes had. The problem was, that in 1973 the British motor industry had fallen way behind the continental competition in about every respect, that they simply did not stand a chance! In the early 60s this was all different. BMC in particular had plenty of competitive or even superior products, they were just kept from selling them in large numbers due to the tariffs (which worked both ways!). With an EEC membership when the ADO16 was launched, the sales would have been much better all across Europe, with large benefits for BMC.

      • Exactly what I am getting at.
        BMC was slagged off for producing unexportable boring mechanical stodge so they hired Alec Issigonis to design a new range of innovative cars. The Mini and ADO16 reached parts of the world that other British cars couldn’t reach, but they were prevented from selling at a competitive price in the biggest European market by Britain’s exclusion from the Common Market and as a consequence were bullied into a merger with Leyland because of competition from the Ford Cortina MK2,a car designed for the domestic market.
        If Britain had joined the Common Market at the beginning of 1965 I suspect BMC would have not fallen into the clutches of Leyland, and their misguided attempts to turn BMC into a clone of Ford UK.

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