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E THREAT OF FOREIGN BODIES
Page 52
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UK bodybuilders are coming under increasing pressure from large Continental manufacturers, but advances in technology might work in their favour. John Dickson-Simpson reports.
As if the UK bodybuilding sector wasn't already highly competitive, domestic producers are facing threats from abroad, made worse by the financial assistance and covert protectionism that are established policy in some other EU states.And this is quite apart from the generosity extended to the eastern recruits to ease their transition into the promised land of the EIS.
Continental examples of state-funded bodybuilding include the big factory built by Henschel in Antwerp. Word has it that grants from the Belgian and German governments helped build the plant.which can turn out 15,000 bodies a year, primarily for vehicles grossing 2.8-3.5 tonnes. In other words, it could body almost every 3.5-tonne chassis registered in the UK in a year.
These economies of scale are envied by British bodybuilders—who are responding with their own capital-intensive production lines for popular sizes. Turnover might be raised by going for export business, and on the face of it this should be made easier with the advent of pan-European whole-vehicle type approval. But in practice countries are inclined to impose additional rules, often in the name of health and safety, as well as conditions imposed by insurers.
Cross-border deals might be developed to provide short cuts of mutual benefit. But mergers bring the risk that the dominant partner will close a British plant when the market enters a downturn, as has happened to many British manufacturing companies.
Where the export prospects brighten is in partnerships with the chassis manufacturers and their extensive dealer networks,This is where whole-vehicle type approval acquires a role as a generator of business.
For many years chassis manufacturers have been making attempts to sell ready-bodied vehicles: they currently account for 30% of 3.5-tonners but only 10% of 7.5-tonners. The trend seems best suited to lightweights —heavier CVs generally offer a greater variety of specifications, and this is not conducive to economies of scale. In any case, local dealers tend to have arrangements with local bodybuilders.
At the vehicle assemblers, the champions of type approval envisage a consequent improvement in body quality.This is probably a vain hope,judging by the draft type-approval documents.They impose no strength or durability standards (unlike Germany's TEN and Dekra). It seems all a bodybuilder has to do is check compliance with the relevant European directives (although there are more than 17(1 questions), In other words, the technical side of type approval should hold no fears —but the bureaucracy is a different matter, so there is a temptation to leave it to the chassis manufacturers.And type approval might discourage cheap competition from beyond the EU.
Commercially, the involvement of chassis manufacturers can bring better bodies. Giving a two or three-year warranty on the complete vehicle rather than just the chassis would be an incentive to choose bodies that do not bring unexpected repair costs or depreciation.
But this is not always the outcome. Often a chassis suppliers' technical scrutiny is either cursory or ignorant, focused on the question of cost. Picking bodies by price is understandably, common practice,even among the major players. Rental fleets that once prided themselves on specifying bodywork that retained value have recently been choosing the lowest bidder anattitude fostered by the competitive tendering enshrined in European Commission procedure.
This emphasis on price rather than value ripples corrosively along the supply chain. Anorexic margins leave bodybuilders relying on quantity to extract a viable income out of a percentage point or two of profit:11ml can inspire ingenious production engineering but is more likely to encourage sacrifices in quality. Only a large bodybuilder can handle an order for 400 bodies at a time. But the price is driven down, and the delight at receiving the order is likely to be superseded by worries about absorbing volume-sensitive overheads until the next big order comes along.
A classic solution is to expand the market spread—in other words, put effort into exporting, as the Continental producers have done. But that entails capital investment that is by now probably unaffordable unless deals with chassis manufacturers provide a market base. Establishing a plant in Eastern Europe could lower production costs. but that would bring the hazards of arm's-length management.
Factory costs might be cut by concentrating on kits for assembly, but the purchasing would have to be lean. Wage-hill savings would have to absorb what is virtually the insertion of a middleman into the financial make-up.
Kits for underframes could hold more attraction than those for superstructures. After all makers of bodywork, no matter where they are in the world, have to contend with similar material prices. Underframes offer better prospects for cost cutting,especially when they have harnessed pressed-steel economies and are quick and scrap-free to assemble with bolls. For example, the Rhiwa self-assembly kit features Z-section longitudinals with notches in the lip to receive clamp bolts of slotted cross-bearers with extendible ends to suit any body width.Another, by Netherlands-based Scarabee, has a series of punched holes in galvanised channel runners to take a range of cross-bearer pitches.
These are the sort of mass-produced steel components for which the Indians and Chinese are scoring about 60% price cuts —but a bodybuilder would have to order them by the container load.
So whichever way the British builder of mass-market truck bodies turns, there are obstacles. Bodybuilders in niche markets stand the best chance of staying profitable.
Keen to be green
The desire to be seen as environmentally virtuous is spreading fast. Big companies such as the supermarkets. Royal Mail, Pepsico and Kingfisher are mounting drives Lo use recycled materials.
They are also anxious to cut weight —at the least to retain payloads despite chassis becoming heavier.The transport suppliers of these companies, such as TNT and Northgate, are meeting this need by buying bodies that are dearer, but lighter, cheaper to maintain and use recyclable materials. We are back to value instead of cheapness.
Here Omnia of Nottingham is arousing interest with sandwich-wall box vans moulded from recycled polypropylene. So far about 800 are in service.At f42/m2these panels are double the price of plywood-and-polyester laminates but assembly, using a thermal fusing process, takes less than three man-hours..
Technology might be the saviour of British bodybuilders— and with a sustainable premium. •