AUSTIN MOTOR COMPANY
Page 8
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MANY DIFFICULTIES OVERCOME IMPRESSIVE EXPORT FIGURES MR. L P. LORD ON THE OUTLOOK
The thirty-second ordinary general meeting of the Austin Motor Company, Ltd., was held on 18th December at Longbridge Works, Northfield, Birmingham, Ma. L. P. LORD (chairman and managing director) presiding.
The following is his statement, which was taken as read:— Our last meeting was at the end of March this year. In my statement to you at that time I reviewed briefly the war productions of your company and gave as clear a forecast as was possible of the immediate prospects. The intervening Period has seen the end of the last of our war contracts, and the satisfactory settlement of all outstanding accounts with the various Government Departments, except for a few small items which do not amount to more than £150,000.
We can therefore approach the future with no problem left over from the past to cause us concern, and with the internal difficultlea of reconversion from war work to normal production known and largely overcome. At this stage in our affairs I feel that you would wish me to tell you what we have already accomplished, and to sae you some Idea of our present position and prospects for the future.
SATISFACTORY FINANCIAL POSITION
I think you will agree that the balance-sheet discloses a satisfactory.lanancial position, and the directors in their report have drawn your particular attention to one or two Important items. There Is, however, a question which may still be outstanding in your minds, and that is with regard to E.P.T. You will have seen from the report that as the company did not attain its E.P.T. standard in the year under review a repayment of E.P.T. estimated at £600.000 Is receivable. I think I should disclose to you that the total paid by your company In excess profits tax is to the region of £2,000,000, all at 100 per cent.
SUPPLY SHORTAGES
Since last March the re-equipment of the engine factory in the North Works at Lam/bridge has been completed, so that now it is absolutely modern and right up to date. The effect of this is already being shown in the still better quality of our power units, because of the even greater accuracy and higher finishes to which it is now possible to work. The front and rear axle production shops have also been dealt with and the painting, trimming and finishing shops are equipped in a manner which facilitates the handling of the enormous volume of material which passes through them daily. As our production expands all this will finally be reflected in a lowering of overall costs.
Much has been sald and written about the shortages of supply of most items which go to the making of a car. During the year we encountered every supply difficulty we could imagine, and many which were completely beyond our conception. However, by one means or another we were able to overcome them, with the result that we have produced about 30 per cent, of the total cars made in this country since the end of she war.
The actual comparative figures (or cars only are:—Iune, 1945, to 31st July. 1946, all makes, 111.123: Austin, 32,292. The following shows the despatches of cars and commercial vehicles for the current financial year:—August, 6.387: September, 8,194; October, 8,711; November. 9,442; ftrat week in December, 2.126, the average deliveries for the last 14 weeks being 2,033.
EXPORT FIGURES
Your company's contribution to ' the export trade through our subsidiary the Austin Motor Export Corporation has been impressive. In the twelve months ended 3rd August, 1946, a total of 16.986 vehicles was exported, to the value of £4,758,456. of Which 13,967 were saloon cars and vans and 3,019 were commercial vehicles. In the first 18 weeks of the new season, to the 7th of December, a further 14,048 vehicles were despatched, to the value of £3.525.348, bringing the post-war total to 31.034 vehicles, comprising 25.578 cars and vans and 5,456 commercial vehicles and a value of £8,283.804. These figures are testimony of the extent to which the corn. Daisy's long-established Interest in overseas markets has been projected into the post-war period, when the earning of foreign exchange to pay for our food and raw materials has so much national significance. One hundred and eighty main distributors now
hold the Austin export franchise. They cover virtually every territory at present' -open to trade with Great Britain. .The corporation is'currently, shipping to over eighty countries. The volume of export trade sustained in .recent months. is three times as great as the averase pre-war . volume. and twice as great as the peak figures reached in any pre-war year. The value of our export trade has increased five times, a figure far in 'advance of the over-all national target.
OVERSEAS ASSEMBLY The overseas assembly of Austin products Is an important feature, and one which is likely to extend considerably, In conformity with strong national aspirations, to participate in industrial activity of this kind. The principal assembly plants for motor-cars are at present those in Australia. New Zealand and Eire. Commercial vehicles are locally assembled in many territories. The Export Corporation maintains resident representatives in Australia. South East Asia and the Far Fast, India and Ceylon, South and last Africa. the Mediterranean and Middle East, Canada and South America. By this means close day to day contact is maintained with the majority of markets. With the remainder, modern communications enable visits to be exchanged as frequently as may be desirable. The ground for light cars is being rapidly consolidated, while its the sixteen horse-power model we have a five-seater car of impressive performance which is successfully entering markets supplied in the past by international competitors. Our commercial vehicles continue to play their part too in maintaining our prestige. All possible steps are being taken to meet the testing time when the present spate of world demand inevitably declines. At what time this point will be reached cannot be foretold. It is, however, certain that our products will command, as always, a substantial share of the world trade in automobiles.
CURRENT FINANCIAL YEAR
As you will no doubt have assumed from the production figures, the trading results of the first four months of the current financial year—that Is. tat August to 30th November—have been very satisfactory. The increased production has had a marked effect on the distribution of our overhead expenses, and we were expected to be In a position to announce the first reduction in our selling Prices on 1st January nest, coupled with a still greater output.
THE FUTURE Unfortunately the prospects for the Immediate future have suddenly become very disappointing. The control of thin gauge steel sheet began last month, but we were not notified of our allocation for January. February and March of. next year until the 3rd of this month. Until then we had no reason to believe that we should receive less than our average consumption for November and December. It was on this basis that we planned further increased output for January, believing that we could maintain our current rate of production on standard models and increase by using light alloy sheet on such things as van bodies, ambulances and on the new 25 hth. range to be announced in February.
The allocation of steel to the motor industry has been drastically reduced, and our quota for the first quarter of next year is much less than the amount we were consuming in October. November and December.
NEED FOR MORE STEEL • This means that output must be reduced proportionately unless we can obtain greater quantities of light alloy sheet. The Immediate prospects in this direction are not too Promising. as this material Is also being used in the housing programme. We expect, therefore, that our production will fall to an average of about 1.800 vehicles a week for the first quarter of neat year. and will necessitate the sacrifice of some of our export markets. For the second quarter—April. May and June—we cannot count on any greater allocation unless the Government change their policy of steel distribution and Permit more cars and commercial vehicles to be made.
As I have already said, we were hoping 90
be able to announce some reduction in our selling prices from 1st January next, due to the reduction in our .overhead charges, but unfortunately the seurtailropt of output which I have envisaged wiil mean an -unnVoidable rise in the proportion of overheads, and therefore It Ss with the utmost regrit that I must warn you that an increase in Prices for the whole 'range of our products is likely early, in the New Year.
"DISHEARTENED AND
DISAPPOINTED"
I am Sure you will realize how disheartening is the feeling of disappointment that -pervades. the whole of your factory. We base the most selfcontained plant, in this country, with our own foundries, stamping plant, Press ;hops. etc. Because of this and the enthusiasm of our wafts and worltheople we were able to effect the change-over in production after the war quicker than atty other British manufacturer, and unmake such a very satisfactory contributionto the country's exports. It is to be hoped that In spite of present indications we will receive a larger allocation of steel for the second quarter of nest year, so that we can look forward to a return to ,our, present rate of production, and to the programme we 'bad planned Which rose to 3.000 a week by the middle of next year. I am indeed sorry to have to give yOu such unpalatable news, but as during the last few months we have published the actual weekly production figures frnm your factory, t thbught it right that you should have knowledge of the bad news as well as the good. I can assure you that when things do take a turn for the better I she!! be only too pleased to inform you of that also.
NEW MODELS
Since the war we have been making only fourcylinder cars. Many of you. I know, have been waiting with anticipation for the announcement of new models in the six-cylinder range. These we hope to release in February of next year. They will be of 18 and 25 h.D., to use the old' fashioned nomenclature, and will have a choice of two modern bodies, one by the Austin Motor Company and the other, which we are calling a "Princess " saloon, by our recently acquired subsidiary company, Messrs. Vanden Plus. of London. We hope also to announce in February the new range of 25-cwt. commercial vehicles, which embody several new features, and on the same chassis an ambulance, for which we already have a very heavy demand. Unfortunately the Government Depattment controlling the steel allocation would not allot any material to these models, so that any we produce will entail a reduction in quantity of other models. Therefore, during the first few months, deliveries will be on a very *small scale. but we thought It better to announce them rather than to hold them up any longer.
QUESTION OF 'RUNABOUTS Many references have been made recently to the desirability or probability of the production of small runabouts in this country. It is perhaps unusual to make a statement on such a subject, but in view of recent Press reports I think I should tell you that we arc not contemplating the immediate production of any vehicle of this kind. When it appears desirable that a very small car should be marketed your company is in the best position of all to do it, and to do it quickly. You will have seen the announcement of the association into which we have entered with Messrs. Crompton Parkinson for the manufacture of electric vehicles. I am sure you will be pleased with this protect, and satisfied that the Joint efforts of your company and Messrs. Crompton Parkinson will be sufficient guaraatee of its success.
CO-OPERATION OF STAFF AND • WORKPEOPLE
And so we approach a future full of uncertainties, beset by many difficulties, but satisfied that as far as is humanly possible we have laid our plans to overcome them, and comforted be the knowledge that our finances are sound and Our staffs and workpeople equal to any task which they May be called upon to undertake. 'sVe have reason also for real satisfaction in the spirit of co-operation and cordial relationship which permeates the whole of the Longbridge works.
The report and accounts were adopted.