BRITISH EXPORTS
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WORLD MARKETS
An Explicit Summary of the British Overseas Trade in Commercial Vehicles, Indicating the Most Important Factors Affecting its Volume
By
A. 0. Tookey, B.Com., M.I.Ex.
Overseas Secretary, The Society of Motor Manufacturers and Traders
THE British commercialmotor industry faced the year 1939 with a considerable confidence in the future of its export trade, for in the previous year it had consolidated its position in the principal markets, and had extended its contracts in several new directions.
In the event, two circumstances arose which militated against the 1938 export total of 14,000 vehicles and chassis being repeated. First, consumption of new vehicles by the importing countries throughout the world slackened appreciably. Secondly, the rearmament and war effort placed on British manufacturers a strain which inevitably affected the United Kingdom export position.
Nevertheless, United Kingdom exports during. 1939 reached a total of over 11,000 units, and it is noteworthy that about .2,300 of these were shipped during the last four months of the year, a period when the view was widely but erroneously held that the War had eliminated many of Britain's exports of engineering and allied products. Special steps were taken by the motoiindustry to correct this impression, which, in the absence of the usual official export statistics, was understandable.
Equivalent American and Canadian totals are not yet available, but at the end of September these main competitors had jointly exported about 2,0(X) fewer vehicles than in the first nine months of 1938. Little can be ascertained directly about German truck sales abroad since March, 1939, at which point they had fallen 25 per cent. behind those of January to March, 1938, but overseas registrations show that the commercial section of the German industry continuously lost ground during the past year.
• Big Demand From the Empire • As usual, a large proportion (73 per cent.) cf British exports was consigned to the Empire, the principal British and foreign markets being indicated in the following table, which relates to the numbers of complete trucks and buses and chassis exported during the 11 months ended November, 1939: Empire Markets Foreign Markets 1. Australia ... 2,861 1. Denmark ... 932.
2. Eire ... 1,386 2. Sweden 210 3. India & Burma 1,241 3. 1.7ruguay 173 4. New Zealand... 771 4. Norway 171 5. South Africa ... 428 5. China 144 6. Malaya ... 237 6. Portugal ... 121 If a basis of value were adopted for compiling the foregoing table, the South African market would rise from fifth to second place in the Empire list, on account of the comparatively high proportion of complete public-service vehicles purchased. In the list of foreign countries, China would rank first, whilst Latvia, Iran and Argentina would replace Sweden; Norway and Portugal among the first six. Such changes in ranking arise from the fact that the British industry exports light vans, truck chassis and public-service vehicles in ever-changing proportions to almost every market in the world. Trolleybuses, municipal and special vehicles of various kinds are all included ; but not tractors, whether for road haulage or agricultural purposes, these being the subject of separate statistical records.
During 1939, overseas purchases of completed vehicles declined considerably in relation to those of chassis. This Movement was in direct contrast to that experienced between 1937 and 1938, and the circumstances has naturally involved a substantial diminution in the value of the country's total etports of commercial vehicles. Whilst the export value of chassis fell only from 22,000,000 to 21,750,000 (11 months), the value of complete vehicles exported fell from 21,500,000 to 2650,000 approximately.
• Principal Movements in Exports •
The principal movements in the numbers of vehicles exported to particular countries are shown in the following table, the comparison again relating to the 11months' period : Portugal should also be mentioned on account of the increased value of its purchases. China's place in the table is due to the development of the Burma to China road, in which connection a valuable contract was secured by British interests. .
The competitive picture in Australia, Britain's principal market for all types of motor vehicle, remained stationary; that is, the British proportion of the commercial-vehicle trade again reached 20 per cent, of the total. Hence the decreased shipments to Australia were due entirely to market contraction..' American and Canadian interests accounted for the remaining business, which related principally to light trucks of the type with which it is comparatively difficult for British manufacturers to compete c.n price, due to the immense discrepancies in the sizes of the respective home markets. B39 Nevertheless, British light trucks have been steadily gaining ground in Australia and elsewhere for some years' past, and in the heavy truck and bus sections British vehicles are generally supreme.
British manufacturers supplied well over 80 per cent. of Eire's commercial-vehicle requirements in 1939. This has been an expanding market in which American manufacturers have only a slight foothold, despite the fact that they are at no tariff disadvantage.
Up to September, 1939, the Indian market was expanding at the rate of 47 per cent. over the 1938 figures. Impoits of British trucks and buses increased by 78 per cent., which indicates satisfactory progress, although foreign vehicles still predominate. The British vehicle will come increasingly to the front as and when the standard of motor road transport rises under the influence of the new Motor Vehicles Act.
• Encouragement from New Zealand • In New Zealand the British position was well held at a level of 27 per cent, of the total consumption of new trucks and buses. Two factors to be reckoned with in this market have been, first, the import licensing system, which has pegged the competitive situation as between British and foreign interests at its 1938 position, and secondly, the amount of exchange available to cover New Zealand's motor imports, which has controlled the total volume of trade. This feature explains the decrease of 566 units in United Kingdom exports to that Dominion.
Although South Africa's imports of commercial vehicles tended to increase slightly during 1939, there was a substantial falling off in British truck exports. The leading American groups, with their local assembly plants, undoubtedly hold an immensely strong posi
tion. South Africa was the only British country to import any appreciable quantity of German vehicles, 184 chassis being supplied up to September. British vehicles are particularly well patronized in the publicservice field, certain municipalities refusing to entertain the thought of deviating from their British suppliers.
• Importance of the Scandinavian Markets •
Three of the four leading foreign markets for British vans and trucks are in the Scandinavian area, Denmark being of outstanding importance, followed by Sweden and Norway. Denmark has an import-licensing system which does undoubtedly work to the advantage of United Kingdom exporters; but on the other hand there is a perpetual shortage of exchange to cover all the trade possibilities. A further repressive influence has *been the fact that Germany also has enjoyed strong trading relations with Denmark, and German motor vehicles have for many years past been in the forefront of Germany's commercial exchanges under its various trading arrangements.
The South American markets have been comparatively slow to respond to the earnest efforts of British manufacturers, but Uruguay, Argentina and Brazil are all becoming increasingly familiar with the British products. The outlook in Uruguay is particularly promising, provided always that the quota position does not remain so difficult. The controlling factor in the South American trade is very largely the amount of Britain's purchases of South American produce.
A further reference to the direction of 1938-1939 exports of German trucks may assist an appreciation of the effects of war conditions. About three-quarters of Germany's pre-war exports were directed to European countries. Its chief markets were Hungary and Yugo n40 slavia, but substantial shipments were made to 20 other countries. The recent admission from Berlin that Germany can no longer send its motor vehicles overseas does not indicate any cessation of trade with the great majority of European countries. On the contrary, German conipetition will be intensified in this area, which, however, has never absorbed more than 20 per cent. of United Kingdom exports.
Further analysis shows that overseas shipments of German trucks have been consigned mainly to storm centres SUC.3 as China or Japan, or to South America. Here, perhaps, apart from South Africa, is the principal direction ir which the elimination of German supplies will benefit the British Industry. Some advantage may also arise in the African Colonies and Protectorates.
There are, however, far more important factors on the horizon than the elimination of uneconomic German competition. Under present conditions, a principal concern of the British Commonwealth is to conserve its sterling funds, and so it becomes uneconomic for the time being to purchase essential goods such as motor vehicles from non-sterling countries if they can he obtained elsewhere.
Thus the position of the British motor industry is potentially strengthened in all our overseas markets, particularly as Canada, being outside the sterling bloc, is no better placed at the moment than her American neighbour.
• Colonial Preference for British Motors • All the Crown Colonies are, in fact, placing restric. tions on the import of foreign and Canadian motor vehicles, ad if British manufacturers can meet t.M full demand fcr the types of vehicle demanded, it is not unlikely that most of our Colonies would be prepared to use their powers of import control to the extent of prohibiting foreign imports. At present there is such a tendency in regard to motorcars, although it may be too much to hope that full advantage of the situation can be taken immediately in the case of comthercial vehicles.
A recent announcement by the New Zealand Government further shows the way the wind is blowing. For the first six months of 1940, that Dominion is prepared to admit motor vehicles from the United Kingdom only, and a substantial amount of exchange is to be released to cover such purchases. This is a welcome and commendable gesture by a Government which has long promised to give every consideration to British exporting interests. Official inquiries recently made by the Australian and Rhodesian Governments as to the United Kingdom production and delivery position may foreshadow similar tendencies.
• War Encouraging Buying from Us •
Indeed, there is every encouragement to think that the war will influence foreign trade also towards the 'United Kingdom. The purchasing power of.this country, allied now with that of France, is so outstanding that neutral countries throughout the world must pay increasing attention to those principles of bilateral trade which have in the past received far too much lip service and much too little practical recognition. Some countries may think themselves well rid of German barter agreements.
It should not be thought that the position of the American motor industry will be weakened to any serious extent by such developments. American exports are not so high a percentage of total production as is the case with British motor exports; therefore temporary fluctuations in the export trade are of less moment. In any event, there is a considerable distance to be covered before the British attack on the light-truck markets of the world can deeply affect the entrenched American position. Canada, as one of the senior parbeers in the Empire, may be expected to overcome, by one means or another, the disinclination shown in some quarters to trade outside tne sterling bloc. .
It is, then, for British motor manufacturers to take the earliest possible advantage of the exceptional circumstances which favour them. An earnest of their desire to do so is available in the shape of the excellent returns of United Kingdom vehicle exports during the first three months of the war, recently released. Four months ago it was almost inconceivable that the machine
shops and assembly lines would continue to function to such an appreciable extent on civilian production. Now the atmosphere has cleared; an export policy, approved by the British Government, has been laid down and its full execution could be frustrated only by the unpredictable course of war events, however certain the result.
In the immediate future, British manufacturers of 'commercial vehicles will have their hands fuller than they have ever been before.
Let all overseas distributors, dealers and users be assured that the impatience of the British motor factories to fill each export order with despatch will even exceed their own impatience to receive and operate the vehicles demanded. Through mutual confidence and consideration, there is scope for all-round satisfaction.