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Operators need not fear effects of the 'big league'

26th January 1968
Page 39
Page 39, 26th January 1968 — Operators need not fear effects of the 'big league'
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Which of the following most accurately describes the problem?

by A. J. P. Wilding

Technical editor

NEED vehicle operators fear that the BMHLeyland Motor Corporation merger will result in a giant monopoly, to the detriment of customers? In my opinion the answer is On the goods vehicle side, the only models made by BMH companies that "clash" with LMC products are BMC vans and Guy heavies. Of these, only the duplication of heavies is of significance: the Leyland vans (which originated as Standards) do not appear in the best-seller list in their field, and neither does the 2.5-ton Leyland 90, which has had an undistinguished sales career in the UK.

Among the heavies, Guy's Big I models are in the same category as Leyland, AEC, Albion and Scanunell designs, but it is relevant that being in the LMC has had very little effect on the designs of the individual companies.

Logically, units requiring large capital investment and large-scale manufacture to make them viable should be applied as widely as possible. This has happened in the case of the Ergomatic cab and no doubt will be repeated with major units such as engines in the future. But Scammell still uses its own individual cab and there has been no move to drop AEC or Leyland engines to standardize on a common unit; Scamrnell still uses nonLMC power units in its models.

There will not be any marked reduction in competition through Guy being linked with LMC. It is difficult to obtain production figures having any real meaning, but in the sector covered by the new giant it will not have much more than 50 per cent of the British heavy market. The signs are that it will have a job to maintain even this if the Transport Bill has the effect of limiting the manufacture of over-16-ton-gross chassis. The three American-owned firms—Ford, Vauxhall and Rootes (Cominer and Dodge)—are now making maximum-gross chassis, not yet up to the highest weights of LMC companies, but no magic will be needed to jump the remaining 4 to 8 tons.

If operators ever came to feel that their interests were affected by a monopoly situation, this would be felt as a sales resistance and the door would be open to other makers. The same can apply in the p.s.v. field. I know that many managers feel the same apprehension as those quoted by Derek Moses (page 30). They have reason for concern if it is likely that beneficial competition between Leyland and Daimler will be reduced. But will it? There are signs that AEC and Leyland still fight as hard individually as they ever did. Being linked with Leyland may have stopped AEC thinking about a rear-engined double-decker—but this is quite a different thing from an amalgamation forcing one company to drop a model.

Talking of double-deckers, what about Bristol? Here is a company with considerable potential and ability—and Leyland cannot have an excessive influence here even though it has a 25 per cent share. If there were thoughts on making radical changes to the Fleetline, the many Gardner lovers in the p.s.v. field could jump straight to Bristol.

And is the future of double-deckers so secure? Large-capacity single-deckers could take over the biggest role in the future, and this would enable the quantity producers to get into the market without too much difficulty. It would also be an opening for a body builder making an integral design with running units of any make required by an operator.

Certainly the British Leyland Motor Corporation will need to consider any moves it makes which might antagonize operators, lest it opens the door to latent but possibly strong competition. Operators can take heart from this.

One of the factors that has made the British vehicle industry as competitive as most is the existence of large-scale component makers. Firms with a near-monopoly in one component give advantages to the vehicle makers even though they may not realize or admit it. Having the lion's share of a market is the greatest spur to efficiency; it is much easier to go down than up. A man at the top of a ladder can only move in one direction.

Most of the concern by operators is founded on thoughts that models will be dropped and choice reduced, but looking back on Leyland's 'record in its successive mergers one sees that the companies have all retained their individualities—and models. Austin and Morris have lost their identities within BMC over the years but this is quite a different field, where common production to get numbers up and prices down is much more vital.

This may turn out to be so with BLMC heavies in the future—maybe 5, 10 or 15 years—but will some standardization be so disastrous? Provided that products are top class, and management benevolent in its dealings with the customers, there must be advantages, notably in lower prices.

The future for the European vehicle industry is in large manufacturing units. There is going to be a "big league" in the next 10 years or so, with maybe only one local maker of importance in each country in addition to the American giants who have firm footholds in a number of countries. This is why the BMC/ LMC link is important from a national aspect. This is why the Government has played a big part in encouraging the negotiations.

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Locations: Bristol

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