The optimism of Austin Rover marketing in 1984/5 is in stark contrast to what’s left of the company now…
By SIMON WEAKLEY, a Marketing Trainee at ARG in 1984, and now Managing Director of One Vision Marketing – an Automotive marketing Consultancy
Optimism in the Eighties…
IN 1984 Austin Rover Sales and Marketing were situated on the vast Canley site in part of the old factory complex that had been home to Standard Triumph. The company’s main commercial operations were sited there too. Engineering was situated on the Fletchamstead highway, as was Product Planning, the Design studio recently constructed for Roy Axe, and the Managing Director’s Office above Product Planning. Also on the site was a huge Unipart distribution warehouse.
The offices for Sales and Marketing were not ideal, having been converted from the former factory space occupied by the Triumph Herald/Dolomite. Even the pub opposite the entrance to Sales and Marketing was, and still is, called the Herald, in deference to site which used to produce the bulk of Triumph products in the 1960s and 1970s. As part of the rationalisation enacted by Michael Edwardes, the Triumph range had been slowly extinguished – leaving just the Triumph Acclaim by January 1984. This bore no resemblance to the former Triumph range that had peaked in 1971 with sales over 130,000 in the UK alone.
To visit Sales and Marketing took the visitor through some rather palatial double doors into a spacious lobby. Then you found yourself in a maze of corridors, small offices and finally a large open plan office where the bulk of marketing operations took place. The main departments were Advertising, Market Research, Exhibitions, Fleet sales, Marketing Finance, Corporate Identity, Service Marketing, British Car Rentals (AR’s commercial car rental arm), plus the offices for the other directors of the company.
Behind the façade of offices lay a huge empty factory space. The offices were quite spacious, modern with new desks, equipment and carpeting, a good canteen and with the benefit of all being on one floor. Some 500 staff were housed in the facilit,y whilst many of the sales processing activities and the Midland regional sales office were situated at the much more sombre Longbridge Complex. Going to Longbridge was like going back in time, whereas Sales and Marketing felt a lot more vibrant, optimistic and had a certain spirit of the 1980s ‘can do’ mentality.
Rewind to 1984
So what was going on in 1984/5 and how optimistic was the companies marketing department that the company was finally turning around. Well January 1984 kicked off with the launch to internal employees of the Austin Montego range of saloon and estate cars. We were all invited to presentations at the exhibition hall at Longbridge to hear Harold Musgrove and Mark Snowdon (Product Planning) extol the virtues of the new range. This was three months before the official launch to the world’s media.
I remember clearly the reveal on stage which showed a Montego 2.0 VDP in Cashmere Gold, an MG Montego 2.0EFi and a Montego VDP EFi estate in Moonraker Blue – surely the best colour in the AR colour chart and previously only available on the Rover SD1 Vitesse. I for one thought the range was fantastic and so much better than the rather awkward Maestro.
Harold Musgrove was equally bullish, and I remember him clearly saying that this was the first mid range car since the Austin Cambridge where the company could truly say it could take the competition from Ford and Vauxhall head on. Mark Snowdon went into some of the technical details such as the seven-seat option on the estate, the ECU managed fuel delivery which gave class leading fuel consumption, the standard five-speed gearbox on the 1.6L, the huge boot with drop down rear seat on HL and upwards, and the class leading cabin room.
The car was half a class bigger than the Cavalier and yet the same price and seemed so much more stylish than the ‘jelly mould’ Sierra that was still seriously struggling to remain number one in the fleet market despite Ford’s impressive marketing efforts.
Metro had finished the year before as the best selling small car in the UK taking 8.1 per cent of the UK market, Maestro had had moderate success in its first year, and Montego was surely going to be a winner in the all-important upper-medium sector. It was so much better than the Ambassador and Morris Ital, that it replaced, that we in marketing felt that it surely was going to meet its ambitious targets.
During those first crucial months of 1984, the advertising agency, Dorland, was going into overdrive getting ready for the Montego launch. Many senior people from Dorland’s visited Canley in those first few months of 1984 and at times caused resentment by turning up in their white Audi quattros, and sometimes all white suits!
Montego was launched in the last week of March 1984, and received quite a good response from the UK media. Motor Magazine was typical in calling the Montego ‘make or break’, and its technical editor, Daniel Ward, described the car in some detail liking the novel features and the digital talking dashboard on the MG EFi. However Motor felt that the 1.6 was the pick of the bunch, being smoother than the 2.0-litre O-Series engine, which came in for some criticism as being too harsh and quite noisy.
Dorlands honed in on the car’s driver appeal and specification coining the phrase, ‘The car that puts the driver first’. The fact that the 1.6L could achieve 53.3 mpg at a steady 56 mph must have impressed cost conscious fleet managers – as did the 12,000 mile servicing. The car was very advanced especially the electronic management system, that made these fuel figures possible. However during the first year the ECU gave rise to many problems especially ‘hot starting’.
Basically once the car had been run and then left, when the engine was already hot, it would then not restart! The old reputation of BL unreliability definitely had an effect on cautious fleet managers who had been caught out before. The only other negative aspect was that the gearchange on the 1.6-litre versions fitted with the VW ‘box – it was notchy and poor compared to the outstanding PG1 gearbox on the 2.0-litre versions. It would not be until 1988 and the Phase 2 version (‘88.5MY’) that this would be put right.
A good start
Sales were brisk for the rest of 1984, although the car never managed to outsell either the Cavalier or the Sierra. There are three possible reasons for this:
Firstly Ford and Vauxhall had deeper pockets than ARG and were prepared to offer fleet discounts (up to 40 per cent off list) to large fleet operators, and ARG struggled to match these offers losing many big orders.
Secondly in July 1984, ARG launched the Rover 213 – a small saloon that in some ways competed with Montego for sales, especially in 216 form. Two saloons, similarly priced and competing for the same fleet and private sales diluted the success of both ranges.
Thirdly ARG marketing did miss a crucial trick. Company car taxation gave employees a tax bill based on engine size. Ironically HM Treasury had aided BL by setting a tax break at 1800cc which had benefited the 1.7-litre O-Series Princess and Morris Ital. By 1984, Ford and Vauxhall had latched onto this and offered a 1.8-litre option for both Cavalier and Sierra (including the very popular Cavalier 1.8 SRi).
ARG had no equivalent Montego, but the solution was staring product planners in the face. In June 1985, ARG launched the Rover 216 Vitesse and VDP EFi – both with the 1.6-litre S-Series engine, fuel injected to 104bhp. I tackled Austin brand manager, Greg Allport, on this in 1985, and he conceded that there was a case for the 1.6 EFi version for both Maestro and Montego. I am sure an MG Montego 1.6 EFi would have been a good competitor to the Cavalier.
There was one product launch where ARG did excel and that was the launch of the Montego estate with optional rear facing seats and roof bars. From day one, this became the best-selling estate car in the UK, easily outstripping Sierra and the very weak Cavalier estate. This model was launched at the 1984 Motor Show at the NEC, and in Vanden Plas EFi form, became almost aspirational.
Coming back to July 1984, and ARG launched the new Rover 200 just three months after Montego, initially with just the Honda 1.3 engine (12 valves) producing 70bhp. The public was confused at first, because Rover had never been associated with small cars, and this was a lower-medium offering replacing the Triumph Acclaim and Dolomite. The car was aimed at middle-class private buyers, but once the S-Series versions were launched, it became increasingly popular for user choosers in the fleet market.
The motoring editor of the Daily Express wrote in July 1984 that maybe the Montego should have been launched as the Rover 400, to give completeness to the Rover range, as Project XX was planned to be called Rover 800 (saloon) and 600 (Fastback). He did have a point, as there was a gaping gap in the Rover range between 200 and 800 until 1989. Despite this, 200 always sold well, and once the 216 was launched regularly outsold the Maestro.
Upgrading the network
During the summer, I was working as a trainee on a three month secondment to Corporate Identity, reporting to Roger Smith who was an M4 grade (just below Director status). Also in the department were Tony Fitch and Roger Seymour. The department was responsible for updating the dealer corporate signage across UK, Europe and rest of world. In 1983, the 1500 UK dealers had been updated, and in 1984 we were updating all the European dealers. Roger had installed the department’s first standalone computer, and had friend write some specific software that identified which signs were required for each European dealer based on a number of parameters. I spent all summer identifying which dealers needed which signage, and then these could be ordered from the UK sign manufacturer – no easy task. Hard to imagine a company with 40,000 employees and only one stand computer – a BBC Micro with very basic software!
Tony Fitch was responsible for visiting UK dealers photographing the frontages and then designing the signage requirements. Roger Seymour likewise, the difference being that Tony had opted to leave the company in 1983 and come back as a consultant running his own agency Fitch Consultants. As a result he earned far more than the salaried staff and ordered one of the first MG Montego EFis in black that June.
This caused some resentment, however it benefited me, because there was an overtime ban on that summer (as a cost cutting measure) and Roger Smith needed me to do lots of overtime… so we billed it through Fitch Consultants on a monthly basis. Quite often myself and Tony would work until midnight and go off and get a curry at 1.00am. The summer of 1984 was certainly one to remember for a 20-year old marketing trainee, and I became great friends with Tony, Roger and their secretary Dianne.
Their office, although in the rabbit warren of sales and marketing, was separate. It had technical drawing boards, spot lighting and of course the BBC Micro. In common with much of sales and marketing, there were no windows or direct sunlight. The long hours meant that apart from lunch time, I did not see day light for three months, but did earn a great deal for a trainee – £800 per month with the overtime I seem to remember!
The atmosphere was great and we were all committed to the relaunch of Austin Rover and the new products to underpin it. Also during the summer I purchased a Maestro 1.3 L for my mother from the company fleet department, and an Austin Ambassador 1.7L for my Uncle Godfrey, who had just bought a Post Office near Bath. The Ambassador only had 3000 miles on the clock, and I paid £3026 – and the Maestro 1.3L cost £3300. Both provided sterling service for the next seven years.
In August 1984, the Mini had its 25 birthday and ARG launched the Mini 25 in Silver Metallic. It had some useful updates including 12” wheels, front disc brakes and the Clubman triple instrument pack that would find its way onto 85MY versions of the Mini. ARG marketing laid on a free party at Donington race track, and I was drafted in to help with the preparations. Over 100,000 people attended the event that summer – we in marketing had no idea how many would come – a real opportunity to celebrate the success of the Mini and showcase the entire ARG line up.
Motor Show was also busy for ARG that year. As well as the Montego Estate range the company also launched a flagship Montego saloon – the VDP EFi with full leather trim. It looked especially good in Moonraker Blue with Osprey Grey leather trim. Also on show were the 85MY Metros with a five-door for the first time and the ‘all white’ MG Metro (marketing must have taken note of those all white Audi quattros in the car park!).
The MG Maestro 2.0 EFi was also shown for the first time. By now Noel Edmunds had become the face of Austin Rover and featured in a series of TV ads that autumn driving home the message that ARG now had a superb range of products. The all white Metro (including colour keyed bumpers) sold like hot cakes and the Metro VDP five-door was a distinctive offering. The whole range had a superb new one piece facia designed by Roy Axe, and Motor described this as being of ‘Mercedes quality’. Despite these real improvements, the Metro was struggling against new opposition and was hamstrung by the ‘in sump’ gearbox with only four-speeds. Peugeot now had the hot-selling 205, Fiat the Uno, and Ford a Fiesta with five-speed option.
The Rover SD1 was also to have its last update for the 1985MY. Rob Whalley, Rover Advertising Manager, did an excellent job on working on the updating of the specification, including luxurious box velvet seat facings, electric mirrors, sunroof, and high quality in-car entertainment. Even the base 2000 and 2300 were now very well specified, and a new 2600 Vanden Plas proved to be popular in the fleet market.
By the end of 1984 ARG had missed its sales targets and profitability targets. It made a small loss for the year offset by the sale of Jaguar Cars and the profits from Unipart division. A damaging strike had again left ARG with low stocks for the important August registration period and Maestro in particular was not hitting its sales targets. Metro also would never regain the 8.1 per cent market share achieved in 1983.
Missing the targets – and a TV flop…
In January 1985, I again returned from University to work as a trainee for three months in Service Marketing for a guy called Trevor Elliot. The Service Director was a smashing guy called James Blades, who eventually became MD of Fiat UK. The marketing department had done a deal with Yorkshire Televsion to produce a new drama series about a family owned car dealer. It was to be screened from the spring of 1985 and was called The Winning Streak The production team also produced Emmerdale Farm – and it was predicted to be a big success along the lines of The Brothers from the 1970s.
Filming began in a freezing cold January and the on site location chosen was Appleyards of Bradford – a flagship ARG dealership. My first trip up to the filming was with one of your contributors, Ian Elliott, in January in his Cashmere Gold Montego 1.6HL. I was eventually going up so often to take props and liaise from a service point of view, that I was given my very own Maestro 1.3L in Metallic Red with Moonstone Cream trim. I lovingly ran that car in, and it proved to be an excellent motorway cruiser, with the optional five-speed box.
Predictably, The Winning Streak was anything but, and was canned after the first series of 12 episodes (what has happened to that now?)
The story was centred on a family-owned car dealership with an ARG franchise and detailed the tribulations and personal lives of the family, but with plenty of opportunities for product placement and dealership activities. The main problem that I remember was Harold Musgrove’s sensitivity to the script, which if any mention was made of ARG product in negative terms, he would blow a fuse and demand changes!
Feeling the pressure from above…
Meanwhile back at Canley Trevor Elliot (my boss) was formulating the next new strategy for ARG Service centred around his slogan, ‘The price we say is the price you pay’. It sounded like some cheesy game show, but nevertheless went into production together, with a monthly service newsletter for dealership staff. I put together a paper suggesting that service costs be incorporated into the price of the car, and was politely told by Marius Harte (an old time BMC service man) that it would never work! Strange that MINI has just such a scheme called TLC, 22 years later, but I will let that one pass!
Remember as well, that ARG had over 22 per cent of the private market in 1985, so this could have been a substantial incentive for these people to continue buying ARG products.
Service was more important in 1985 than many people imagine. Basically, because of the losses the previous year, the company was on a severe cost cutting drive, and Harold was under immense pressure from the Trade and industry Secretary, Norman Tebbitt, to produce instant results. Mrs Thatcher was not best pleased that ARG had again failed to hit its profit targets, and that Michael Edwards had bounced her into providing yet more funds for the new K-Series engine.
Warranty costs were still a severe problem for the company, and the unreliability of the ECUs, and advanced electronics in Maestro and Montego were not helping. SD1 also still suffered from a lot of small electrical problems as well as more serious cylinder head problems on the six-cylinder versions. The company’s response to this was to severely curtail warranty claims during 1985, which saved short terms finances, but did huge damage to customer relations – a decision that would be reversed by Graham Day in 1986.
In February 1985 all hell broke loose. Rumours swept the company that the Conservative Government was in talks with Ford of Britain to sell ARG lock stock and barrel, and that GM was to acquire Land Rover Limited and Leyland Trucks. Harold Musgrove was incandescent, and rather foolishly decided to take on Mrs Thatcher and the Conservative Government – much to the detriment of his career with the company.
The rationale behind Ford’s interest was that it needed a new engine range, and ARG was developing the K-Series, and it needed an upmarket brand (Rover/MG) to add profit and market share to its range. Obviously the downside for ARG, would be the loss of volume models, such as the Metro, with ARG moving upmarket to sit above Ford (ironically where Volvo is positioned today within PAG).
Ford pays attention…
Harold and the board was instructed to provide detailed and commercially sensitive financial information about the company’s plans and costs. It showed Ford, for example, that a Metro cost £300 more per unit to manufacture than the Fiesta. Harold, not to be deterred, launched ‘Operation Mongoose’, a PR offensive to rally public opinion behind ARG and get enough MPs to back the company staying independent.
Full page advertisements were taken in the newspapers, highlighting the fact that ARG employed 36,000 UK workers and at least another 100,000 were dependent for their employment on ARG. It also talked about the balance of payments, and the fact that ARG had exported cars worth £326 million in 1984, and that this was set to grow.
Eventually because the Government was going through a rough patch in the opinion polls suffering because of the Westland Affair, Mrs Thatcher made a rare decision to back down. ARG remained independent for another three years, but we will never now if that was the right decision. Ford had 25 per cent of the market in 1985, and ARG were on 18.6 per cent. Together they could have produced a formidable European company with a very strong UK presence, and the resources to develop a new range of Rovers and Fords very quickly. Now Ford are struggling in Europe, produce no cars in the UK and ARG has gone completely.
Harold paid the price the following year. Mrs T got her revenge by sacking him, installing Graham Day and making sure that he never received the knighthood he so richly deserved. Probably more than anyone else, Harold Musgrove turned around the fortunes of BL’s volume division and was never recognised for his role.
Back to 1985, and because of the turmoil ARG decided to showcase their real design talents by showing MG EXE at the Geneva show in the spring. This was a complete surprise and the decision was taken to show the public and politicians what Roy Axe and his team were capable of if ARG were given enough time to turn the company around.
The car was a sensation, and eventually Honda launched a clone called the NSX, while ARG never managed to productionise EXE. If anything, though, EXE showed how the company’s latest offerings – Metro and Maestro in particular – were nowhere near as good as EXE. Why couldn’t ARG produce volume cars as good as EXE, the press asked? It was a good question.
ARG also launched a new TV campaign in May 1985 to underline the progress the company was making. Dorland came up with the strap line ‘Austin Rover – now we’re motoring!’ All new cars sold carried a rear window sticker with the slogan. The company was trying to sell itself to the public, and not the products it made. Was this a mistake?
Despite these valiant attempts, ARG could not seem to break through and regain 20 per cent of the market, when the Corporate Plan had predicted 22 per cent market share. Customers don’t like uncertainly, and the Ford debacle had put off many Fleet buyers and prospective private customers. There were still quality issues, and morale sunk within Sales and Marketing when Marks and Spencer declared that it was removing ARG products from its fleet choice because of quality concerns.
Ushering in Rover…
In June, I moved to my last secondment before returning to University and worked for Rob Whalley (Rover’s advertising Manager). SD1 was now effectively on run out phase, but still needed to be advertised and marketed. It sold a very useful and profitable 15,000 units in 1985 before the launch of Rover 800. June 1986, saw the introduction of the vitally important 800 range, as well as the Rover 216 Vitesse and VDP EFi.
The company was also on something of an export drive. ARG relaunched in the Middle East and New Zealand, pushing the upmarket offerings such as the Montego Turbo and the Rover SD1 range – which at least could be specified with A/C. The company must have been desperate, because it even exported 500 Montego Vanden Plas EFi estates to Japan that year – and Montego Mayfairs to the Middle East without the benefit of Air Conditioning!
Europe was a real problem. MG wasn’t even marketed and France, Italy and Spainm had a limited range including Mini, Metro, the Montego 1.6HL saloon, 2.0 Mayfair, and the Rover SD1 mostly in diesel form.
The company signed a deal with Massa Supermarket in Germany that spring to sell the Austin range through dedicated sales areas at its stores. It really shocked us in Sales and Marketing when we learnt that in Germany, ARG’s image was no better than Skoda or Lada! Predictably sales in Germany remained tiny compared to the size and affluence of the market. Out of the 420,000 units produced in 1985, only 130,000 were exports. This was well short of the 600,000 units the company needed to make real profits. That was why Harold and his team had hatched the plot to sell 100,000 cars a year in the US through the Sterling brand starting with XX the Rover 800.
The year ended on a low. Again despite better availability, ARG had not met its sales targets. Metro was slipping, Maestro was a real problem and Montego had a frumpy image, when compared to Cavalier. Rover 200 was meeting its targets, and 800 was only six months away. Rover SD1 was hardly contributing anything and ARG was struggling with the V8 versions.
It is rumoured that the last Vitesses in black were sold to the Royal Police Protection unit in 1986 for as little as £2000 per unit, just to offload them. Certainly BT and the Royal Mail were paying just £1500 per unit for huge batches of Maestro Vans, just to keep the production lines busy.
1985 would be Harold’s last year as Managing Director. Within a year the company would be renamed Rover Group and the process of ‘Roverisation’ would be initiated by Graham Day, the new Chairman. Kevin Morley would be recruited from Ford, and a more bullish 1980s marketing campaign would centre on product improvements, and a more sporting image for the company.
Duotone Montegos and Maestros would keep Greg Allport busy as Austin’s advertising Manager, and Rover 800 would receive body kits and spoilers. Back in Corporate Identity, Tony Fitch and Roger Smith would be busy once again changing all the dealership signs from Austin Rover to just Rover!
Graham Day rightly realised that the company needed to move upmarket, export more and improve unit profitability. He could however never resolve the dilemma of how to complete with the economies of scale of major competitors producing two million plus units, when Rover Group was stuck at 400,000 in a good year, and still dependent to an extent on the supermini sector, where profits were wafer thin.
Perhaps that merger with Ford would have been a good idea after all?