FR • • • A potential to fulfill
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• Graham Morris, Freight Rover's new managing director, has a problem. Only eight weeks into his tenure of office, he feels that the Sherpa's potential is still unfulfilled — if only the British buyer would realise it. Freight Rover must "get the market to believe more and more in the product we've got, because we've got to make it survive," he asserts.
Under the new Leyland Daf regime, Morris is confident that not only will the necessary resources for guaranteeing survival be available, but also that the uniqueness of Freight Rover's position in the group will ensure that it retains the freedom to make its own decisions.
Morris joined Leyland as an economics graduate in 1972. After working in the finance division at Longbridge and Cowley, and as financial controller with the management team that closed the Speke Triumph TR7 plant, he moved into the operations side as manufacturing manager of the remaining Speke pressing plant in 1977.
After a short period overseas with Leyland South Africa (Associated Vehicle Assemblers), he became director for Leyland vehicle assembly and was still there in February this year, when news came through that the Rover group had sold its Leyland, and Freight Rover divisions to Daf.
Morris says that although there were several other front runners for his current job, his financial background and Leyland experience helped him win through, but he did not travel to Common Lane on his own. With him came Bill Lowe, one of Leyland's most respected CV engineers, who now heads up FR's product engineering section.
The Sherpa 200 and 300 series currently sell in the 1.8 to 3.5 tonne sector in the UK, and sales in this market during the first six months of 1987 have risen by over 9% to around 68,700 units.
With Ford consolidating its sales with the new Transit (its market share rose by 46.6% in the first six months of 1987) most manufacturers have faced a decline in sales.
Bedford, with the future of its medium light vans in doubt, has experienced the sharpest fall: 27% in the first six months. Apart from Mitsubishi and Renault, which both increased their sales very slightly, every manufacturer has lost sales this year.
Nonetheless, Freight Rover has managed to increase its half-year sales from 8,053 in 1986 to 8,915 this year, a rise of 10.7%. This gives the company a 13% share of the market, and makes it the second largest panel van seller in this country after Ford, which has a massive 41.3% share.
Morris concedes that Freight Rover has picked up sales following the uncertainty over Bedford but also points to recent moves which, he hopes, will enable the company to maintain its lead over other manufacturers. Two weeks ago FR launched its latest warranty package called 'Van Care', with a load continuation service by the RAC; until the end of September it is offering 0% finance on all new Sherpas.
Morris has inherited the remains of a five-year plan at Freight Rover: he intends to keep to it without major changes. The management team is strong, he feels, and he intends to stand by their plans that have increased production output by 128%, revenue by 300%, and kept the Birmingham-based van builder in profit since 1981.
"Our product is a strength in spite of its age, because people know what they are buying," says Morris. When quizzed about the poor reliability of the Sherpa, he blocks the question like a tired batsman: "It's a myth — the 200 Series has dramatically improved its reliability," but he concedes that there may have been a problem with it in the past.
From 1 September Freight Rover will be using the Multipart organisation for its parts supply — one of the decisions that Morris has made since he got the job. He hopes that within three months of switching over to the new parts supply, the company will be able to offer the Multipart guarantee. "If you can't get a current part within 24 hours then you'll get it free."
It is no secret that a new Sherpa model is on the way; Freight Rover is currently recruiting design staff for the job. With government funds and new Leyland Daf finance the future Sherpa will be built using new plant and equipment at the Common Lane plant.
This leaves Morris with two major problems: first he has to ensure that the existing Sherpa range continues to maintain its market share until the 1990 models come through; and second, he has to develop sufficient funds through the new models to finance their replacements.
The first problem is already being addressed. The Land Rover 2.5 litre engine fitted to the 300 series Sherpas should be getting a turbocharger in 1988 (CM 2-8 July).
There is the possibility of a blower for the direct-injection two litre MDi engine fitted in the smaller 200 Series Sherpas. The second problem is more complex, and Morris concedes that Freight Rover's current production of 20,000 vans a year may not be enough to build a secure future for the company. The solution may lie in exports to the 500,000sales-per-annum European market where there are 390 Daf dealers. Arrangements with Austin Rover's UK dealers to subcontract to sell Sherpa 200 Series vans in this country and for Leyland Daf dealers to sell the 200 and the 300 Series Sherpas are also being formalised.
On the subject of the competition Morris currently ignores the Japanese: "You've got to discount them because they've not yet made up their mind to design a European van."
The Ford Transit is the most serious threat. "It is highly price-competitive," says Morris. "Ford has thrown money at it, but I believe we have a cost-of-ownership advantage."
Marketing the product, continuing its flexibility and availability, and raising the profile of Freight Rover are Morris's strategies for the future. His immediate task is the negotiations with Leyland Daf over the 30% of the 147 FR dealers that are under scrutiny after the take-over.
He does not even discount the possibility of a further van manufacturer tie-up in the future, especially as he will now be free to look at component suppliers from other than the Rover group. "We will look at anything that comes along," he says.