AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

BEDLANI OTORS

24th August 1985, Page 22
24th August 1985
Page 22
Page 22, 24th August 1985 — BEDLANI OTORS
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

Alan Millar looks at the prospects for a GM takeoy of Leyland Trucks

C 4 4 X PLORATORY" talks F

between General Motors and BL over the future of Leyland Trucks were first heard of early in August, in the 'silly season" when newspapers are short of news. Was this a coincidence?

Both GM and BL "talk to many companies with reference to their business activities worldwide" (CM, August 10). In — nearly — the .words of Mandy Rice-Davis: "They would say that, wouldn't they?" However, we do know that no offer has been made for Leyland Trucks. Everything else is speculation. What could be behind a partnership, merger or takeover?

The background is massive overcapacity, losses incurred by most manufacturers and ex-colonial markets falling prey to collapsing economies or Japanese imports.

Might not adding Leyland to Bedford in GM's worldwide commercial vehicle activities exacerbate its problems? Bedford lost .£62.4m last year and the Leyland Group (which includes Leyland Parts and Leyland Bus, not mentioned in the talks) lost £61m.

But GM is creating a worldwide commercial vehicle group, with Bedford a key part, and is trying to become the world's largest commercial vehicle builder. By 1987, it forecasts, annual world demand will reach 11 million trucks and buses, plus military and government agencies' needs.

It is pooling its resources to minimise duplication. A medium van is expected to replace the CF in Europe in the late Eighties. This is the "world truck" policy.

The World factor brings more Japanese-designed vehicles on to GM's European product lines. Isuzu, of which GM is a shareholder, supplies complete vehicles like the KB pick-up and major components and dies for the Bedford Midi van. Suzuki, also part-owned (to a lesser extent) by GM, is poised to supply components and the design for its microvan for manufacture by Bedford.

But it will be a struggle for Bedford to become a healthier force in the British and Continental markets. Its products are either obsolescent, Japanese or carderived — perhaps in some cases a combination of two or more of these.

The Astra van has taken nearly a fifth of the light van market this year. Otherwise the Bedford cupboard is somewhat bare. The CF is being left behind by the Ford Transit and Freight Rover Sherpa, and threatened by Renault's hard sold Tratic and master vans. Even the Midi is suspected to be stealing business from the CF. The K B is limited by Anglo-Japanese quotas.

Above 3.5 tonnes, the TL is being stretched to the limits of possible revamping and the TM is of even older origin. Bedford, like Ford, is losing market share to Leyland and to competing importers. From holding over 16 per cent and second place in the home market in 1981, it fell to less than 12 per cent and third place in July. It is in danger of being eclipsed by Mercedes-Benz and Renault/Dodge, possibly even by Volvo once it introduces smaller models to the UK.

Where will it be when the existing ranges are replaced?

It is easier to see why GM wants to have more than this iron in the European fire. The discussions with Spanish authorities over the likely acquisition of a controlling stake in Enasa, which now owns Seddon Atkinson, would give GM a strong foothold in Southern Europe with the bonus of strengthening a Bedford weakness by having a stake in Seddon's top-weight sales. For Seddon is also gaining market share in Britain.

While GM has tried to buy MAN from its engineering parent company, or at least has had talks "about its business activities worldwide," the door has been shut on more progress. So Leyland, despite its losses — reducing while Bedford's mount — and its weakness abroad, could prove to be an asset.

The T45 range from Roadtrain to Roadrunner has modernised its product profile over the past fivc years and has pushed its market share up by two percentage points while Bedford's has fallen by five. It could push Ford from top position and in the long term secure a desired 25 per cent of the British market. It is making slow inroads into Europe and seeks a deal with China.

Its rationalised production produces far fewer unnecessary model variations than before; it has concentrated most of its production at its semi-automated assembly plant in Lancashire, and it enjoys the benefit of being based in one of the less affluent parts of Britain.

What is lacking is total certainty about its future ownership. While the political climate may not last the decade, it will hive off more of BL from the State umbrella, and a Honda/Austin Rover merger cannot be excluded from the development of the car division. The pressure to retain Leyland Trucks in British ownership may not be great.

GM ownership, with that commitment to building on the company's commercial activites worldwide, could provide the backi needed to maintain a modern range

But is it such good news for Bed Not only arc its production facilitic older than Leyland's, if subject to investment to bring in some of the models, but they are in a more affli area.

If market trends continue, and G did buy Leyland, there could be mr sense in expanding Leyland than submerging it in Bedford. Surplus around Dunstable or Luton would realise far more than any in Lancask or Glasgow where Leyland makes a GM could wipe out a significant proportion of the excess manufactu capacity in Britain by acquiring me it, and create a stronger force for B manufacturing to hold back import But people will be wary of

execution of its policies. It has alrea faced criticism; the Vauxhall range really an Opel range assembled hen and the increasing use of Japanese NO designs, while still using British coi means those Bedfords are not as Br as British vans were 10 years ago.

Any deal with Enasa is likely to 1 condition that the Spanish Governn is satisfied that technology as well manufacturing is kept in Spain. Bri authorities might be well advised tt ensure that future Bedfords and Leylands were not just UK-assembl American or Japanese trucks.

Two dealer networks — one for Bedford, one for Leyland — would be selling for GM. Merging the trui dealer networks could cause unhapp consequences. Both firms are stronE Britain, and shedding of duplication could leave disenfranchised dealers too ready to sell other makers' trucl a bonus for an ambitious importer capital. It would be enough to rend! GM takeover of Leyland stillborn.

Whatever does happen is unlikely emerge immediately. A less formal partnership may evolve, or joint eff in markets where they do not comr.

But Leyland is likely to need a ne owner some day and GM will want pursue its worldwide expansion in s direction. This tale will not go awa


comments powered by Disqus