Power base changing among lorry makers
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EXPORTS WERE the only thing that prevented a severe sales slump, said Daimler Benz in its annual report for 1981. And MAN echoed this opinion in its more recent comments on its financial year ended June 30.
Both companies announced increased profits in spite of the recession and in spite of low market demand in West Germany. MAN last year sold only 39 per cent of its total product on its home market.
At the moment in Europe it is all a question of market share rather than total sales, and here DAF has very slightly improved its share in the market in which it competes, from 5.9 per cent in the first half of 1981 to 6,7 per cent in the first half of this year according to David Mansell, DAF's director of marketing and sales, speaking in Eindhoven the other day. He drew attention to something that is rather interesting — that the German makes, which he rightly said "are essentially strong" are attaining smaller shares of the European market because of the contraction of their home market.
What he didn't say — which the German manufacturers themselves have done — is that some of this contraction is due to Japanese competition at the light end of the market.
Mercedes reported recently that the Japanese makers substantially increased their sales in the Federal Republic of Germany, as in other West European countries, and boosted their market share to 6.4 per cent (3.9 per cent in 1980) in the up-to-6 tons gross vehicle weight class. Foreign makes, whose market share had more than tripled in the past ten years, accounted for 19.4 per cent (16.4 per cent in 1980) of West German lorry sales.
The German performance, however, is also due to the front running of the Scandinavians; Volvo and Scania have the best performance records in the last two years and Volvo especially is almost saying: "What recession?"
In its interim report for the first six months of 1982, the Volvo Group revealed that its sales of commercial vehicles totalled 6,576— a 34 per cent improvement over the same period in 1981.
This, points out the report, was achieved despite the market for lorries continuing to be weak, particularly in North America. Fewer bus chassis, however, were delivered to customers during the first six months this year than in the same period last year.
Trade for Volvo was particularly buoyant in the Middle East where deliveries of the Group's commercial vehicles continued to be substantial. Ever cheerful about the future, even when things have looked very black for the company, Leyland continues to look on the bright side. With interest rates falling — and looking as though they would fall again this year — and with inflation down to single figures, British commercial manfacturers could expect an uplift in demand towards the end of the year, marketing director, Chris Woodwark, said recently.
Order books look healthy, apparently, and the labour relations are satisfactory following the acceptance this month by the workforce of a 5 per cent wage increase deal. Leyland is predicting a total UK market in vehicles of over 3.5 tonnes of 47,500 in 1982 and around 57,500 in 1983.
DAF is more cautious about the overall European situation. Although commercial vehicle sales have shown signs of picking up here and there in Europe, says DAF, it does not think that this means the beginning of the end of he recession.
Even if a definite economic recovery were to occur in the second half of the current year its effects would not be felt in the commercial vehicle market until 1983, thinks DAF. For this reason — apart from incidental minor improvements — the European markets may be expected to show almost the same picture in 1982 as in 1981.
Quoting David Mansell again, he reckons that in the longer term a substantial increase in demand for commercial vehicles in Europe cannot be expected. In his view the real growth in sales must, therefore, come from outside Europe.
The most optimistic comments have come from — of all places — the USA where General Motors president James McDonald recently predicted an increase in annual production in 1987 of one million commercial vehicles on the 1980 world production figure of 5.5 milli° — largely from the Middle Eas Africa and Latin America.
This, in a way, reinforces David Mansell's prediction thr expansion of production is no going to come from traditiona markets.
The US lorry manufacturinc scene is, of course, still overshadowed by Internation Harvester's problems and the American company's efforts t sell off its overseas interests ranging from its Australian company to its interest in Spain's Pegaso and from Seddon-Atkinson in the UK to the company's interest in DAF The Seddon-Atkinson situation has thrown up one o two interesting facts — one being that SA lost £1m in 198( and £9.8m in its 1981 financial year.
On the OAF front, the situati is intriguing. The big question whether the Dutch State Mine and the Van Doorne family tru (VADO for short — the other partners of IH in DAF) will eventually agree to pick up thE IH shareholding (371/2 per cen1 Recently Mr A. Van der Padt vice-chairman of the OAF management board, pointed c that under the terms of DAF's articles of association, Harves. had to offer these shares to thi other two shareholders. However, VADO, DSM and International Harvester were c the opinion that the IH shares should preferably be transferr to a new shareholder, the natL of whose activities would enal it to make a positive contributi
For this reason they had decided to suspend for a few months the procedure providE for by the articles of associatic During this period International Harvester would have the opportunity to look ft a candidate who fulfilled thesE qualifications and was acceptable to VADO and DSM. This meant a right of veto on a IH deal of which VADO and DS disapproved.
It's a complicated situation and what the outcome will be anyone's guess.
• by George Malcolm