People : Octav Botnar and the rise and fall of Datsun/Nissan UK

Bill McWilliam, a former Nissan UK and Nissan Motor GB employee, recounts the interesting and sometimes turbulent story of Octav Botnar’s reign at the top of the British motor industry.

The Datsun Years (1968-1983)

Many may view Octav Botnar as one of the major contributors to the demise of the British motor industry, whilst others may believe him to be one of its saviours as, had it not been for his influence, Nissan, Honda and Toyota may have never set up car manufacturing plants in the UK.

Now, just like at the peak of his career, many people may have never heard of Octav Botnar, and even fewer would have any idea what he looked like, but for many years the reclusive Mr Botnar made more money from the British motor industry than any other individual. He was, according to 1989 Sunday Times Rich List, the ninth wealthiest man in the UK

An Unlikely Entrepreneur

Born in Czernowitz, then part of Austria-Hungry in 1913, Botnar was a fighter, having been at one time a political prisoner, and also member of the French Resistance. After World War Two he returned to his homeland, now annexed to Romania, before fleeing the Communist regime in the mid-Sixties to start a new life in England. Here he became the official importer of NSU cars but, following that company’s takeover by Volkswagen in 1969, his concession was withdrawn. Now well into his fifties, an age where many would be considering retirement, Botnar was left with no choice but to seek out yet another new business venture.

Having already discovered in a Dutch warehouse a small quantity of Datsun cars, in June 1968 he imported them into the UK, fitted radios and began selling them through the remnants of the NSU dealership network. The first six were registered on F plates as press demonstrators. This was not the first time attempts had been made to sell Japanese cars in the UK – in fact, Datsun was one the later entrants.

The first attempt was by Daihatsu, which unsuccessfully tried to export the Compagno into Britain in 1965, but only sold six. This was followed later that year by Toyota which, like Honda and Mazda, had a fledgling operation in place well before Botnar brought in his first Datsuns. However, the main difference was that Botnar knew exactly the type of customers he was hoping to attract and had the drive and determination to scale up his operations rapidly.

Cars for the people

After setting up Datsun UK in 1969, operating as the sole importer of Datsun cars to Great Britain, Botnar quickly recruited a network of dealerships, most of them small, family-run firms, many located next to petrol station forecourts or alongside used car dealerships. Unlike most other importers at the time who, due to high import tariffs, decided to focus on the specialist or prestige end of the market, the cars Datsun UK chose to import were not aimed at motoring enthusiasts, those that covered high mileages or even people that had any interest in cars.

In Britain, Datsun cars were aimed at ordinary people, those with little mechanical knowledge, who just wanted economical, good value, reliable cars that could transport them and their families about town and on occasional longer journeys and who often bought them as an alternative to a second-hand car.

The initial range that Botnar imported consisted of small and medium-sized saloons and estate cars. Neither the Datsun 1000 (B10), below, or 1600 (510) models were noted for their performance or for their handling, but instead they offered high levels of standard equipment and above all previously unheard of levels of reliability at a lower price than the British or European competition. Although considered less advanced than the latest European cars, the larger of the two models did feature OHC engines and independent rear suspension – albeit that it did lack disc brakes!

Although imported in small quantities, mainly to satisfy the egos of his Dealer Principals, Botnar had little interest in the sales of the larger, more prestigious Laurels and Skylines, or the 240Z, despite its strong sporting reputation. It was the cheaper Cherrys, Sunnys, Violets and Bluebirds that Datsun UK imported and sold in their thousands. Usually unconventional in their styling, with liberal use of plastics on both interior and exterior trim, each model generally came in an often bewildering range of body styles, two door, four door, coupe and estate, but with few engine options. This simplified the parts distribution networks. Each model also tended to receive some form of bodywork makeover with regular frequency.

Rocking the boat

With sales of more than 6000 cars in 1971, then five times that number the following year, the UK was the only market in the world where Datsun constantly outsold arch-rival Toyota, usually by a ratio of almost two to one. This put Botnar in a strong negotiating position with the Japanese manufacturer, allowing him to constantly reduce the prices paid for the cars he imported and, as a result, by 1973 Datsun UK had become one of the biggest importer of cars into Britain. As the network of dealerships spread, there were showrooms in practically every town and, by the late Seventies, the number of individual Datsun outlets rivalled Ford.

In 1974, the UK motor industry was in a precarious state. British Leyland, Chrysler and Vauxhall all saw their market share collapse as more and more buyers chose to purchase imported vehicles. To address this worsening situation the Society of Motor Manufacturers and Traders approached Harold Wilson’s Government to provide protection against the intensifying levels of imports from all countries. As the UK had become a member of the EEC the previous year, fair trade agreements meant there was little that could be done to reduce European imports, so instead the attention became focused on the cars arriving here from Japan.

The demands for action further intensified in 1975 when the Government had to step in to nationalise British Leyland as well as bale out Chrysler UK. Eventually a voluntary agreement was negotiated between the UK and the Japanese trade bodies to keep imports at 1977 levels, a maximum of 11% of the market for the next five years. Most other European countries either already had similar restrictions in place or introduced them soon afterwards. This voluntary agreement in the UK did in fact remain in place for the next 25 years and had a significant impact on the British motor industry as well as the fortunes of most Japanese car manufacturers.

‘Gentleman’s agreement’ for Japanese carmakers

Between themselves, the Japanese importers decided that their market share should be split in the same proportion as their previous years’ sales. Datsun, having followed a policy of going for volume sales of cheaper models rather than higher unit profit were the clear winners, being granted 6% of the market. Toyota, with their slimmer dealer network and having more focus on larger saloons and sports cars, were given around 3.5%.

Mazda, having put their main sales focus into troublesome rotary-engined models along with Honda, their range at the time consisting of only the Civic, and Colt (Mitsubishi), which had only entered the UK market three years before shared the remainder. Later on this carve up would make it extremely difficult for other Japanese manufacturers such as Daihatsu, Suzuki and Subaru to get a foothold in the UK market but, as this agreement did not affect commercial vehicles, these manufacturers, along with Mitsubishi put a lot of their efforts into the sales of vans and pick-ups.

As the market share for the following year was based on the current years’ sales, Datsun had to ensure that they maintained their 6% market share. To achieve this Datsun UK became the master of the dealer special edition, with two-tone paint and whitewall tyres being commonplace, despite having been out of fashion for well over a decade, along with vinyl roofs, wheel embellishers and pop-up glass sunroofs. Any shortfall in sales was dealt with by mass pre-registration at the end of each year.

Keeping the customer satisfied

Typical Datsun buyers were not wealthy and Botnar fully understood the benefits of carefully-packaged finance agreements. Unlike other makes, his finance was fully underwritten by the importer. By having complete control of the finance and offering low deposits and preferential interest rates, this allowed Datsun UK to be in a strong position to ensure their customers could afford to change their cars every few years. Marketing was mainly done through press advertisements, focusing on the economy, reliability ease of ownership and value of the product, often featuring owner testimonials rather than the expensive and extravagant television productions favoured by other manufacturers.

Due to their limited market share, there was little point of Datsun or any of the other Japanese manufacturers chasing fleet sales and the low margins they tended to generate. The only company car users that bought Datsuns in any quantity were driving schools, which appreciated their light controls and sturdy mechanicals. Private buyers always remained Botnar’s main target market and, through the vast network of small dealerships, they were provided with exactly the friendly level of service they appreciated.

However, Botnar was ruthless and would not allow anything or any one to stand in his way. One summer, during the lead up to the 1 August sales bonanza that the new registration suffix brought, the transporter drivers held the entire motor industry to ransom by going on strike and blockading the vast compounds where new cars were stored, preventing them from reaching the dealerships for 1 August delivery. While other manufacturers and importers tried to negotiate with the unions to settle the dispute and release their vehicles Botnar took a very different approach.

Having first purchased his own fleet of transporters, he hired drivers then a demolition team and some builders, Botnar then took matters into his own hands. In the middle of the night, while pickets blocked the gates to the compound, he instructed his teams to go to the rear of the compound, demolish the wall, remove all his vehicles onto his transporters then rebuild the wall. When eventually the strike was called off and the strikers returned to work they opened the gates to discover all they had been blockading was an empty compound. That year Datsun was one of very few manufacturers that could deliver new registration cars to their customers on 1 August. From then on Botnar only used his own transporters and drivers.

Expansion into Europe

With the ‘gentleman’s’ agreement restricting the Japanese importers to 11% of the UK market new ways had to be found if manufacturers wanted to increase their market share. The first to make a move were Honda which, due to the small market share the company was allowed to achieve, was unable to sell its entire range of cars in the UK. With the demand for the Civic and recently-launched Accord models using up their entire allocation, Honda chose to enter into an agreement with British Leyland allowing them to build their Ballade model under licence as the Triumph Acclaim. This situation held benefits for both manufacturers, but would likely not have happened had Honda not been so restricted by the number of cars it could sell both in the UK and in Europe.

In 1980, parent company Nissan Motor Company chose to carry out a similar exercise with Alfa Romeo, but rather than Alfa Romeo purely building Datsun Cherrys in one of their factories, the ARNA (Alfa Romeo Nissan Autoveicoli) featured Alfasud drive trains and many interior parts to increase local content. The resultant vehicle was sold through Alfa Romeo dealerships giving them a much-needed competitor in the supermini class, and also through Datsun dealerships as the Cherry Europe (below). However, the project was not a great sales success as dealers on both sides of the agreement gave the car little support. Botnar, in particular,had little interest in selling an Alfa Romeo-engined car as it did not fit well with Datsun UK’s customer profile, despite the fact that the car could have allowed him an increased market share.

By the early 1980s, most Japanese manufacturers realised that the only way that they would be able to increase sales in Europe would be by manufacturing their own cars there and Octav Botnar knew exactly the best way to achieve it.

The Nissan Years (1983-1992)

A changing market

By the early 1980s Nissan, along with most other Japanese manufacturers, now had huge global ambitions. In Europe, the import restrictions in most countries that had been accepted voluntarily severely limited any potential growth. The only way by which it could be achieved would be to start the manufacture of cars within the EEC. To coincide with their new ambitions in late 1983 the Datsun name was dropped in the UK and the Nissan brand adopted.

In the UK by the early 1980s the motor industry had changed significantly. With Ford, Talbot and Vauxhall now importing a large percentage of the cars sold in Britain from their European factories, it became increasingly difficult to establish exactly in which country a car had been built. This was particularly significant in the fleet car market, where traditionally companies had insisted on a British-only policy. Also, in 1982 the Ford Cortina, the UK’s top-selling car for almost every year of the previous decade and long established fleet favourite, ceased production to be replaced by the controversially styled and initially less well-received Ford Sierra.

With Nissan on the lookout for a site within Europe to build a new factory, the UK fleet market in a state of turmoil and the sales for the recently renamed Nissan UK limited to 6% of the British market, Octav Botnar spotted a great opportunity. Botnar convinced Nissan Motor Company in Japan that, if the company built a reliable, good value, conservatively styled, medium sized-saloon car in the UK, it would have the potential to dominate the company car market in exactly the same way that the Cortina had done throughout the previous decade.

The sales of this new model would be incremental to the 6% of the market Nissan already held and this new car could also be sold throughout Europe free from import restrictions. Having convinced Nissan Motor Company in Japan that this plan could not fail both he and the parent company in Japan went on to persuade Margaret Thatcher and her Government – which had by now become tired of supporting a consistently under-performing British Leyland – to provide the required financial incentives.

Nissan’s British Bluebird

On 1 February 1984 work started on Nissan’s new £700m factory, built on a greenfield site in Sunderland, Tyne and Wear. In a similar manner to the Ford plant at Halewood, and Rootes plant at Linwood 20 years previously, the new Nissan plant was built far away from the motor industry heartland, in an area of economic decline and huge unemployment. The car chosen to be built there was to be a new Nissan Bluebird in both saloon and hatchback form, replacing both the previous Bluebird model as well as the slightly smaller Nissan Stanza. As a conservatively-styled four and five-door saloon it would be similar in dimensions to the now defunct Cortina and would be produced in 1.6-litre, 1.8-litre and 2.0-litre versions, exactly the type of car that the UK fleet market bought in their thousands.

As well as satisfying the UK business user, as it was produced within the European Union, it could be sold in unlimited quantities on the European market including the UK, and would also allow Nissan UK to take up 6% of the British market with imported cars. Botnar had a lot of influence over the eventual specification of the car, particularly trim levels, assuring Nissan in Japan that this was exactly the car the fleet market was looking for. Unlike most Nissan models previously sold in Britain, the new Bluebird came in a wide range of trim levels from poverty-spec Premium to the all-singing, all-dancing Turbo Executive with air conditioning and leather.

A new approach

With the first of the British-built cars coming off the production line in 1986 and now being in a position to take a much greater share of the UK market, Nissan Motor Company wanted to have more control over the marketing and distribution of the cars it sold in Britain and, in 1985, had suggested buying Botnar out, or at least becoming a partner in Nissan UK. Talks eventually broke down with Botnar determined to keep 100% control over his business and retain the annual £120m profits which it generated. However, he did accept that he would have to create an enhanced dealership network to handle the anticipated increased volume of sales British-built cars would bring.

In typical ruthless manner he did this by terminating his agreements with hundreds of the small Nissan dealerships, the ones that had helped build Datsun into a major player in the British car market, and replaced them with his own purpose-built car supermarkets under the AFG (Automotive Finance Group) brand. Often they were built right on former Nissan dealers’ doorsteps. These car retail supermarkets meant that Botnar now had complete control of, and profit from, practically every aspect of Nissan products, from the point they left the Sunderland factory, or arrived at the port. These included distribution, transportation, dealerships and vehicle finance. To give some idea of the level of profit he was able to generate, a Nissan Micra (below) retailing at £6495 was costing Botnar less than £3000 when it arrived in the UK.

To maximise sales the friendly, family-owned dealerships were gone. Instead, he recruited ruthless, hungry sales people, incentivised by ‘on target earnings’ in excess of £50k per annum- a sizeable sum in 1988, for selling an average of 25 cars each month. Should they miss their target by one their income almost halved. Do it more than once and they were out the door. It was an extremely cut-throat environment, a long way away from the family-friendly Datsun dealerships of the Seventies and early Eighties. And I should know: as a 22-year old, my own involvement in the motor trade began as a salesman, cannon fodder at one of Nissan UK’s AFG dealerships.

Dealer Principals were summoned to Nissan UK’s Worthing headquarters for quarterly meetings where, over lunch, Botnar would drink wine whilst his guests sipped on water. Any under performing General Managers would get a public dressing down and were often advised not to return to their dealership.

To demonstrate their faith in their product, Nissan UK introduced three-year warranties on all its new cars, probably the first to be offered in the UK. These were not in fact manufacturer’s warranties, but yet another innovation from Botnar himself. During this period Nissan’s sales volumes in the UK did increase dramatically, but not nearly to the levels Botnar had promised the manufacturer back in Japan.

Fleet sales still remained elusive as, in the intervening years, since the demise of the Ford Cortina, the fleet market had changed considerably. Rather than the Fleet Manager dictating the type of car that employees drove, this had became the era of the company car ‘user-chooser’, where the company car driver would be offered a (sometimes substantial) list of cars they could choose from. Bar-room banter focused on 0-60 times, BHP and outward displays of performance such as alloy wheels and spoilers – in this context, the Bluebird did not impress. Moreover, by the late Eighties, Ford and General Motors were at all out war, continually improving specs and cutting costs to increase their fleet market share. Then there was the name: who would choose Bluebird when you could be a Cavalier?

That is not to say that the British-built Bluebird was a failure. Despite not achieving Nissan’s expectations in the UK, throughout the EEC the car sold considerably better than its predecessor, being particularly popular in Germany, Italy and Spain, justifying Nissan’s investment. In line with Nissan’s goal of enhancing their image from cheap, dependable but unexciting cars they had a raft of dynamic sports cars and luxury vehicles in the pipeline including the new 200SX and 300ZX. These were to be followed by the Bluebird’s British-built replacement, a car that promised to be dynamically a match for Europe’s best.

Nissan Primera: Top of the class

Released in late 1990 the all-new Nissan Primera both surprised and exceeded all expectations. Here was a Nissan car that was every bit a match for the Peugeot 405 and Vauxhall Cavalier, the current class leaders, and could even be mentioned in the same breath as the BMW 3 Series. With its 16-valve engines it could match its rivals for performance, as well as for handling and outclass them all for reliability. With its new name, here was a car that company car users would love. What could possibly go wrong?

In line with their move upmarket, Nissan Motor Company in Japan had decided that their cars could no longer be sold on price. If they could match their rivals on performance and technical ability, they would play on the same playing field on price. Botnar was furious. His whole Nissan UK empire had been built upon providing value motoring to ordinary people, whilst retaining healthy profits for himself. This was Nissan’s most important British launch in their history, but in the lead up to the Primera’s announcement the battle on pricing raged on. It soon became a farce, played out on the pages of the motoring press. Unable to negotiate the pricing levels he demanded, the British Primera launch became an enormous non-event.

Despite the motoring press raving about this unexpectedly impressive new Nissan being ‘Best in Class’, the promotion from the importer was only notable in its absence. There were almost no television or press advertisements, and to the general public the Primera slipped onto the market practically unnoticed. Determined to force Nissan’s hand and force them to lower their price, Botnar initially sold the new car with the slimmest of dealer margins and at a showroom price considerably higher than the outgoing Bluebird. Sales were dismal, with less than 2000 sold in the first three months, to the point where practically all production at the Sunderland plant was switched to LHD. However, worse was to come.

Trouble ahead

In December 1990 Nissan Motor Company, unwilling to be held to ransom by Botnar and prevented from achieving both the brand image and the sales it desired, gave Nissan UK one year’s notice of termination of their import concession. Botnar immediately responded by starting legal proceedings, claiming breach of contract and unfair termination in an attempt to either get the decision overturned or receive £250m in compensation.

In April the following year, with relations still acrimonious between Nissan UK and Nissan Motor Company one of the trusted mainstays of the Nissan range, the Sunny was replaced by an all-new, higher-tech version (above). This all-new car had the appearance of a scaled down Primera, with great performance from smooth 16-valve engines and a specification far ahead of almost all of its aging competitors. Again Nissan was determined to push the car upmarket and increase the unit cost. This time Botnar responded by adding his usual healthy dealer margins, resulting in a car that not only cost a vast amount more than its predecessor, but also cost considerably more than all of its rivals, as well as some of its larger Primera siblings. Botnar claimed this was solely down to the manufacturer having increased their unit cost by 32%.

Price lists at the time showed the entry-level, five-door Sunny 1.4 LS at £10,890, the Primera 1.6LS at £9995 while the Ford Escort 1.4 started at £9400. Nissan UK had now priced its cars at levels well above what its traditional customers could afford. In addition, lack of marketing in any form meant that new customers were barely aware of the new models and, even if they were, considerably better deals could be had on all of its rivals.

Despite this, Nissan Motor Company had not given up on the UK. The Sunderland plant had been an enormous success boosting sales throughout Europe and the company could see the potential for further expansion. The British cars were every bit as well built (many say better) than their Japanese equivalents. To further expand their sales in Europe, Nissan had already decided that the all-new Micra replacement was to be built there.

The battle rages on

For the remainder of 1991 both Nissan Motor Company and Nissan UK held their positions, Botnar running down the Nissan brand whilst stockpiling new Nissan cars. To compound the situation Botnar was also accused of tax evasion and was under investigation by the Inland Revenue whilst at the same time trying to negotiate deals with other manufacturers with a view to becoming their sole importer and replace Nissan in his showrooms. A deal was almost struck with Fiat, but due to confusion about the time difference Fiat executives arrived at Heathrow airport to find no-one there waiting for them. They promptly got back on their plane and returned to Turin.

In the meantime, Nissan Motor Company set up a new import operation, Nissan Motors GB and began recruiting new dealers. Botnar, always a fighter, was not giving up and, as he still held practically a year’s supply of unregistered cars, from January 1992 there were two competing dealership networks, selling almost identical model ranges.

Those selling cars under Nissan UK badged their models LS, GS, GSX, Nissan Motors GB badging their cars LX. SLX. SGX. This farcical situation played out for the entire year as Botnar gradually sold off his dealerships, signed them up for standard franchise agreements with other manufacturers or turned them into used car supermarkets. Now in failing health and still under investigation by the Inland Revenue, Botnar’s operations gradually wound down, his days of being an automotive superpower were coming to an end.

The end of Japanese cars

In late 1992, the first K11 Nissan Micras (below) with its class-leading 16-valve engines and advanced specification began to come off the production line at Nissan’s Tyne and Wear plant. It was the first car from a Japanese manufacturer to win the European Car of the Year award. Around the same time Toyota began production of the Carina E at its plant in Derby. It did not take long before people stopped referring to Nissan or Toyota as ‘Japanese’ cars. Between them, Nissan, Toyota and Honda all invested enormous sums into UK production facilities, producing cars with a large proportion of local content and, as a result, created thousands of jobs. Soon what would be regarded as ‘British’ cars had been changed forever.

During the later years of his life Octav Botnar donated a huge proportion of his wealth to good causes, The Great Ormond Street Hospital having a wing named in his honour. He died in 1998 having, for better or worse, made an enormous impact on the British motor industry.