Four-maker lorry link in Europe
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• Four Continental truck manufacturers this week signed an agreement for technical co-operation on medium commercial vehicles in the payload range of 6 to 12 tons. The agreement, which provides for co-operation on development, purchase and production of components, has been concluded between Volvo, the Swedish independent; DAF (Van Doorne's Automobielfabrieken), Holland's independent truck maker; Saviem, the truck-making subsidiary of the French Government-owned Renault organization; and Klockner-Humboldt-Deutz, the German group which makes Magirus-Deutz vehicles.
Each manufacturer will remain independent but all four will have equal stakes in a holding company with a starting capital of about £170,000, probably to be set up in Holland. A subsidiary in France will be established to supervise the development of standardized components and joint design and testing.
The agreement imposes an obligation upon the four partners not to opt out within the first 10 years.
Observers on the Continent see this move as a reaction to Britain's coming entry into the EEC, since manufacturers with UK plants are especially strong in the mediumweight truck sector.
The agreement will not affect the cooperation which already exists between Saviem and the German MAN company which, especially in the heavy truck field, involves reciprocal manufacture and supply of such items as engines and cabs. Saviem also has a long-standing arrangement with Alfa Romeo in Italy, confined mainly to van components, while MAN owns Biissing and has links with Daimler-Benz, with whom it also shares the ownership of the company developing truck gas turbines.
Although this new arrangement in the medium field leaves the manufacturers independent it is yet another step in the general trend towards consolidating the European motor industry into groups. Taken together, Volvo, DAF, Saviem and KHD make in total over 30,000 heavy goods vehicles annually, or perhaps 20 per cent of Continental truck production.
The European consolidation in recent years has included the purchase by DaimlerBenz of the Henschel-Hanomag group from the Rheinstahl engineering combine and the taking over of the Krupp truck business; models are no longer made under this name, but Krupp's engineering and service network has proved valuable.
Complementing the MAN-SaviemRenault-Alfa Romeo link-up is the FiatCitreon-Berliet-Unic grouping of French and Italian interests.
From Britain, Bedford, Ford and Chrysler/ Rootes have already established worthwhile sales of light and medium commercials in some countries on the Continent and, as revealed exclusively in CM on November 5, Ford is about to launch a major assault on the Continental market, using the Belgian Genk plant and the Amsterdam assembly factory as well as British plants. Ford Amsterdam will be switched totally to trucks next year. Chrysler had exploratory talks with DAF about three years ago, with a view to purchase, but nothing came of this. At that time it was suggested that the medium-weight Cornmer and Dodge models would be a useful complement to the heavy DAF trucks. Some years earlier there had been abortive merger talks between Rootes and Henschel, while DAF and Volvo had, before the latest move, been talking inconclusively for years about a possible technical agreement.
Mergers, groupings and technical agreements are likely to be accelerated by technical requirements as much as marketing pressures. Investment costs in tooling for new models can be immense. It is likely, for instance, that MAN will in future years use Daimler-Benz V6, V8, VIO and V12 diesels exclusively for its heavy trucks, while supplying pressings and chassis units for Mercedes in return. The same consideration will also encourage the import of proven American components for some heavier models—for instance, there is talk of General Motors building its US V6 and V8 high-power diesels in Alsace as EEC power units which would be available to Bedford—though there has also been talk of at least one of these engines being produced by GM at Wellingborough, Northamptonshire.