THE COMMON MARKET

21st September 1962, Page 114

21st September 1962

Page 114

Page 115

Page 114, 21st September 1962 — THE COMMON MARKET

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Keywords : British Leyland, Leyland Motors, Truck, Mot Test, Car Manufacturers, Alternative Propulsion, Ashok Leyland, Grey Import Vehicle, Business / Finance

:hallenge

By SIR HENRY SPURRIER

Chairman and managing director, Leyland Motors Group DESPITE all the critical negotiations which have been held during the summer in Brussels regarding Britain's entry into the Common Market, we now find that it will be October before these negotiations are again resumed. By then, the Commercial Motor Show, which opens today, at Earls Court, will have taken place and we will have had an opportunity of seeing some of the new models which, you may be sure, will have been designed to a certain extent with the Common Market in mind. To this end I would expect to see a trend towards heavier construction to cater for the larger payloads allowed on the Continent. At the same time, lighter multi-wheeled models will be produced to carry greater payloads under the U.K. restrictive regulations.

It is true that they published proposals last week (as reported in The Commercial Motor), but even amongst the Common Market members themselves, no general agreement has been finalized on the physical dimensions and weights of commercial vehicles and the legal conditions governing them. It is 13 years since the United Nations Conference of Road and Motor Transport, commonly known as the Geneva Convention, published its recommendations on these very points. By and large, Continental firms are building in general accordance with the recommendations of that Conference; but Britain so far remains very much aloof.

The European Conference of Ministers of Transport (E.C.M.T.), at which Mr. Marples represented the U.K.. also considered weights and dimensions of commercial vehicles and recommended figures. The more important of these were the overall length of 50 ft. (15 m.), the maximum gross vehicle weight of 32 .metric tons, and the maximum permissible load on one axle of 10 metric tons.

Variance in Regulations

British manufacturers producing in the home market must cOmply with the U.K. Construction and Use Regulations of the Ministry of Transport. Unfortunately, these regulations are at variance with the E.C.M.T. recommendations; for instance, the U.K. regulations provide for the maximum of ,nine tons for the axle load, as compared with the 10 tons recommended by E.C.M.T. Some countries in the Common Market have an axle rating as high as

12 tons. Now there are the new E.E.C. proposals to consider: they recommend 10 tons.

As transport managers know, these differences are fundamental to the whole problems of design and operation of vehicles. It is therefore essential for all concerned that agreement is reached by the E.E.C. as soon as possible on improved legislation. Once this agreement is reached, our Ministry of Transport must adjust its own regulations to permit vehicles for the home market to fall into line, otherwise British vehicles will be unable to compete on equal terms with those produced by other European manufacturers It is a well-known fact that British manufacturers. behind the scenes, are already preparing to meet the larger dimensions and increased weights. In the U.K. we have r

200 h.p. engines. in quantity production suitable for 1 ing up to 32 tons on the motorways in Europe. Geart and rear axles have been designed to take the larger tc

that these engines produce. For instance, at Ley where we design and manufacture all the major units in our vehicles, we have now produced axles up to I: ratings. These, together with axles of 7, 8, 9 an tons which are already in production, can be used system of permutations to give various loadings for and multi-wheel vehicles which will meet almost regulations which are likely to be reached by the E.E.

The foregoing emphasizes very clearly the difficulties that face British vehicle designers and ducers. A succession of Ministers of Transport ap to have been concerned very largely with the poi, aspect of their problems and have shown less regarc or appreciation of the practical economic difficulties constantly face our industry. The Common Market, entered, will certainly prove a challenge to us, but it sh be a challenge worth meeting, for trade within the " is running 50 per cent. higher than it was in 1958. real value of production within the Common Market c tries has been rising at about, or above, seven per annually—almost twice as fast as that of the United St

Firm Toe-hold in Europe During 1961, British commercial vehicles earned ru £122m. in foreign currency, usually against compet from Continental manufacturers. Around 168,000 of 460,000 commercial vehicles produced were exported, of these 13,000 (worth i8m.) were sold to the Corn Market countries and 19,000 (worth film.) to the men. of the European Free Trade Association. British c mercial vehicles, therefore, already have a firm toein Europe and would be well placed for further penetn once our membership is established.

The wage differential between Great Britain and c countries of Europe has in the main operated to our advantage since the end of the war; but recently the has narrowed quite sharply and may continue to do For instance, in West Germany wages have risen b■ per cent. in two years and in other countries of the " by six to 14 per cent. In consequence the cost per of production in West Germany has increased by t per cent., as compared with four per cent, in the U.1

A very important problem continually faces us in marketing and servicing of British heavy vehicles on Continent. Within the industry it is the accepted pm( of the manufacturers of lighter commercial vehicles cars to market their products through distributors al Heavy vehicle makers, on the other hand, are r inclined to open their own sales offices and build their servicing depots. The Leyland Group has pursued a policy and extended it to countries overseas, within Commonwealth, as we have found it offers a numbe advantages. By undertaking selling and servicing vehicles through its own organization, the manufact can keep in closer contact with the customer, antici needs more accurately and provide the service neces'y to keep the vehicles in full and effective working order the maximum possible time. The operation of this ;tern does, however, involve the manufacturer in the

estment of considerable capital sums. For example, : Leyland Group•has had to invest Om. in South and ntral Africa to provide. the facilities which we deem be necessary for our customers' requirements.

It is doubtful if a duplication of this system on the intinent could be economically justified as a general ictice, due to the excessive financial commitments ,olved. Various schemes of distributorships and agents

likely to be tried by different manufacturers: but, espective of whichever scheme is adopted, it is most sirable to obtain thorough coverage in each country, Continental operators are not dissimilar to their British unterparts and quite rightly expect quick, efficient and tdily available service: Speaking for my own company, an assure operators of Leyland Group vehicles that the lernes we have in mind, when fully developed, will ensure 1 service for their vehicles on any Continental trips they ty make. Whatever system of marketing is adopted, :re is no doubt that manufacturers in this country will quire a further increase " in capital and more liquid ;ources to meet this problem.

To provide this capital and, just as important, the skilled rsonncl to operate it, companies must go to the market r more capital or combine their resources of finance and !hnicians with other companies or both. Large groups other countries are extending their activities in more and we countries and, before they get fully entrenched there, itish manufacturing companies must compete with speed. e quickest way to do this is to combine their resources th those of Other British companies and so either double .ttpenetration in a particular country or extend their tivities to twice the number of countries.

ore Collaboration Likely

More amalgamations, therefore, can be expected so it companies can expand and exploit markets which mid otherwise be difficult for them to operate. Furtherwe, this eliminates duplication of effort now taking place the export plans of a number of British companies. In

2 vital sphere of research and basic engineering, where !. effects of the difference between success and faithre ye widened greatly in recent years, collaboration between rnpanies undoubtedly brings substantial advantages.

A few weeks ago I predicted in public that the motor Justry would eventually resolve into a handful of large pups of international standing, I knew that a few eyeows would be raised. But I believe that this statement true. Sooner, rather than later, this will be the pattern r the motor industry in the Western Hemisphere. These aups will cater for all forms of road transport from the small car to the heavy commercial vehicle. Britain must not be left out of this. That was the reason for the amalgamation of A.C.V. within the Leyland orbit, who are already associated with over 50 companies allied to vehicle manufacture throughout the world. Together we can compete in foreign markets with far greater strength, but without comparably increasing overheads.

Of course, if Britain does become a member of the E.E.C., trade will be two-way and we must be prepared to meet the challenge of foreign vehicles entering the British market. Imports of commercial vehicles into the United Kingdom are negligible at the present time, due principally to four factors: the tariff imposed on imports, the problem of servicing foreign vehicles in this country, the operation of construction and use regulations to the disadvantage of foreign firms, and the highly competitive products and prices of the British commercial vehicle industry. Of these, I am convinced that the fourth is by far the most important. Although some increases in imports can naturally be expected as tariffs are reduced and construction and use regulations commonized, I do not think that they will represent a significant proportion of home market sales.

When we come to basic engineering, I know that British commercial vehicles can stand comparison with any in the world. We have been competing with Continental vehicles in world markets for the past 15 years and we know their strength and weakness. The basic units of our vehicles are more than a match for any produced on the Continent. The Motor Industry Research Association and its proving ground near Nuneaton have done as much as anything to improve the quality and reliability of British vehicles. Every well-known British manufacturer uses this proving ground and its gruelling stretch of Belgian pave to test its models, which usually have to cover thousands of miles without structural failure before they are placed in production. I am revealing no secret when I say that some Continental and American vehicles which have been tested on this track have given an extremely poor showing.

We are all aware that we as commercial vehicle manufacturers and-you as operators will be confronted by sizeable problems if Britain enters the European Common Market. I do feel, however, that we can be sanguine (although not complacent) about the outcome, as we know that we have excellent products and a first-class knowledge of transport operation and costing systems and our trucks and buses have been tried and tested under conditions far more arduous than those on the Continent. We feel, too, that our current powerful models designed for many years of life, will show up even better under autobahn conditions, for they have been designed to meet our own new motorway era. We in Britain have trucks noted for their economy which give transport a good start in the Continental venture. There is no reason why all of us should not find extensive new markets in the new Europe.

THE COMMON MARKET

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