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Truck target 1980 by Brian Cottee

BC: Everyone is asking how soon are we going to see the beginning of the end of the present recession? Have you any answers on this front?

PL: As you know, we originally looked at an 86,000 truck sales market in Britain this year: that is, vehicles above the Transit range. When the recession really started — last October in our book — we began to revise our estimates and in April this year we set a 1971 figure of 75,000. But the rate still continued to go down, and it bottomed out in June at an annual rate of only 62,000. so we rewrote our forecast again, at 65,000 — a pretty massive reduction from both our original forecast and our revised one. Then came the Chancellor's July boost so we wrote in another 3,000 trucks, making 68,000, but it just didn't happen. The market stayed flat. We have now firmed up quite definitely that we think it will not go above 66,000 this year — which compares with 76.000 last year.

We feel the market will not really start moving until, say, late February/early March next year. Investment in plant and equipment is the key factor which triggers things off, but consumer demand has been a lot slower in working through than on previous occasions. If we look back, for example, to the 1968 relaxation in the economy there was a lead time of about five months — consumer demand took off immediately, the capital expenditure started about two to three months after that, and the truck market two to three months later. There is usually about a five-month lead time before the truck market starts to be affected. This time it will be nearer nine months. We know it isn't going to happen on the '68 pattern, presumably because we have been a lot further into a recession than anybody thought. The loss of confidence was much bigger than ever before.

BC: There's also the effect of operators holding off until the new weight and axle-spread dimensions are announced.

PL: Yes, and another factor — the Common Market People have been holding back on plant investment until that decision was made. On weights, we presumably must some time follow the EEC and if a man is waiting to buy a heavy truck now he's still going to be using it well into the time that we're in the EEC: and the operator realty doesn't know what he's going to be able to buy and use until the authorities make up their minds on this point. From recent negotiations through the SMMT with the DoE it now appears that a decision on axle spacing is fairly imminent.

BC: How will all this affect your long-term forecasts?

PL: Well, only last week our own economic studies took a look at where we are going from here, short term and long term. We've certainly pulled our trend line down right through to 1980. It is still very expansionist but we have taken the figure down by about 5,000 vehicles a year compared with pre-recession, yet this still means a pretty big growth in the market. Roughly 4 per cent to 4.2 per cent growth a year, which is how the truck market — and I'm not talking about Transit-size vans in this — has risen on average since 1960.

E1C: So you don't see EEC membership causing an upward 'rink in your truck market sales curve?

PL: No, not particularly: the general expansion of trade :hrough the EEC will be pulling one way, roughly cancelled )y the reduction in total road transport ton-mileage pulling he other way. For example, the road ton-mileage in this muntry increased from 61 per cent in 1960 to 76 per cent in 1967, but then it started to come down — really since the then Government began to take measures to push some freight back on to rail. Last year 73.6 per cent of all British transport ton-mileage was by road, but we think it will probably be down to 68 per cent by 1980. We've included International Road Federation and UN Transport statistics, and many others, in our reviews.

BC: On truck sales, do you think the share of the domestic market taken by Continental makers will be just about balanced by what UK manufacturers can sell in the EEC?

PL: Our plans for Europe are now well advanced and so far as Ford is concerned we expect to be very much on the credit side.

BC: How far up the weight scale will your European range go ?

PL: Well, up to the 28 tons gtw that we presently produce, to start with. But we shall certainly by the mid-70s have entered the top end of the weight scale progressively and have a fully competitive range . of products, almost certainly with a maximum gcw of 38 or 44 tons or whatever the limit may be.

BC: Is there a noticeable shrinking of demand in some particular weight sectors? Everyone seems to be trading up the market.

PL: The 6-. 7and 74-tonners are shrinking, and the customers are instead trading up to 8 tons. the D1314 for instance, or higher. Lower down. the 2and 3-ton demand is also dropping away and these folk are often buying into the top end of the Transits instead. This suits us fine. It's interesting to see that the fall-out from the truck market has increased the proportion of long-wheel base Transits sold by 10 per cent in a year. Over 38 per cent of Transits are now Iwb. This market has obviously been affected by the change in the licensing system.

We intend to expand both ends of the market to give us total coverage.

BC: Going track to the Continent for a moment; I suppose you regard Mercedes as the one to beat over there?

PL: Yes, Mercedes is a benchmark. I think they've got about 28 per cent of the heavy commercial market in Western Europe, and we know we've got a long haul.

BC: Will the D Series be the models for your Continental assault ?

PL: Yes, with some small changes: and of course modifications where necessary to meet other nations' regulations.

BC: Although you don't make trucks in Germany, you do make and sell Transits there as well as cars, and I suppose Ford has the advantage of an international name when tackling a new market. I believe the 0 Series has sold quite well in Holland and Belgium, but what's the situation in France ? It always seems a difficult market to assess.

PL: We've done very little with trucks in France and we've just had a new look at the market there. It will really be a part of our total development of Ford trucks in Europe, on a far bigger scale than we have ever done before. Probably the most concrete thing I can point to on that score is that we're going to convert our Amsterdam car and truck assembly plant completely to trucks early next year. It will be mainly a D Series plant, fed heavily from the UK, but making some K models as well.

BC: To round up EEC, how about Italy?

PL: Yes, we are going into Italy as well — we are really not in there with trucks at all But when you are entering a dominated market — as you are with Fiat in Italy — it's got to be done right, from the word go. We're making our plans for a major push right throughout EEC. We are already pretty well established in EFTA countries.

BC: Will you be supplying Europe mainly from Amsterdam?

PL: We could never supply the European market wholly from Amsterdam. When the Transits move completely Out of Langley to Southampton shortly we shall have really good capacity for the heavies at Langley.

BC: So you'll be freighting trucks from Langley to EEC, for example.

PL: That will be one of our sources. Speaking of international road freight. I'm sure a lot of people over-estimate the flow of this traffic. Because they see a lot of Scania and Volvo trucks rolling in and out they think it's an enormous market. Looking at the international statistics, in fact international freight accounts for less than 0.2 per cent of the total UK ton-miles by road. It has got a very, very long way to grow before it becomes a very significant factor.

BC: Do you see your big EEC push resulting in a virtually standard type of European Ford truck for home and Continental?

PL: Well, there will almost certainly be a rub-off, and I hope we shall see common regulations in Europe before 1980, which will help a lot. Of course, we already run our own truck fleet extensively in Europe. Movements to and from our European plants, for instance, are very considerable.

BC: What will you be using as special selling points in getting into Europe? The general impression of Continental heavies is of quality and reliability—at a price.

PL: Weil, you have to have the right quality or you might just as well not bother trying. We will start from scratch with a flaky image. But service will be a very important item and we ire giving a great deal of thought to deciding how to set up lur service organization over there. Our other strong point vill be the wide product range we can offer and the multitude if models within that range.

IC: Does the gas turbine figure anywhere in your plans? You howed the American turbine truck around Europe last year. IL: The position on the turbine is pretty clear now, We have lecided to retail it as an industrial and marine engine in the tates and also run it in a limited bus operation and in some of ur own company inter-plant trucks over there but we don't nvisage it hitting the American truck market on a proper basis ntil at least 1975/6. Then if it were needed over here, we iould introduce it.

C: Coming back home again, it has always surprised me that 'le quantity producers such as yourselves and Vauxhall should e so keen to get into the top end of the market, where there already hot competition for a share of a relatively small cake. 'ow do you justify the investment needed to get into the really eavy truck field? PL: We've always looked at this in terms of a wider market than just the UK. Without Europe included in the estimates it might not be worth considering. In Britain the over-28-ton artics represent only 9 or 10 per cent of the truck market numerically — perhaps 7500 vehicles a year — and there are already half a dozen people in there, some of whom are pretty solidly established. Certainly there is an element of investment gamble in going in there; it is not a market you can enter cheaply, because you have to engineer for it. And you need a dealership expertise which may well be a little different from what you've already got. But there is a long-term pay-off prospect. and it is going to be an expanding market, of course.

BC: What sort of truck market share are you aiming for in Britain — say, next year?

PL: For 1972 we are looking for 26 to 27 per cent of the truck market, which means market leadership if you separate British Leyland's figures into Redline and the rest. We're climbing back sharply after the effects of our strike — we had only 16 per cent of the UK truck market last April, but we were up to 20 per cent by July and we had market leadership in our class in September.

One of the great advantages of increasing our European sales will be that we shall be able to offer an even wider spread of models and variations — types that might not be economic to build for a smaller market. Eventually, we shall, as I said earlier, probably get virtually to uniform specification requirements throughout Europe, with standard rags. But they will have to give us time to meet them; the component industries will need time to engineer.

BC: We've been talking about trucks. How's the Transit picture — the medium-weight range in your classification?

PL: We are forecasting a home market of 115,000 medium commercials in 1972 and we expect Ford to take around 37 per cent of this. As with the trucks. Transits were hard hit by the strike and we were down to 13 per cent, of the UK market in April; but it was 21.8 per cent by May and by July it was 32.5 per cent. September was 33.2 per cent.

The Transit range and the light vans have been very little affected by the recession, but after the Chancellor's measures in July the Transit market really took off again. The industry was selling at an annual rate of 128.000 in August. We're going to run up to the 37 per cent of the market which we'd hit by November 1970.

BC: How competitive is the medium-van market now?

PL: This market is more competitive than it used to be. with new models coming into the market over the past two years. However, it is comforting to see that the Transit has withstood the challenge and maintained its dominance of the market, securing well over 30 per cent.

BC: How strongly does the Transit figure in your plans for Europe?

PL: Well, as you know, it is vigorously marketed there already; EEC is sourced from our Belgian van plant at Genk and EFTA mainly from Britain. If and when we join the EEC there'll have to be a reshuffle to arrive at a new logical supply arrangement but the spread of plants makes us very flexible in this respect For instance, a number of bodies from Genk brought into our Langley plant and subsequently re-exported as built-up units has enabled us to expand our total production of Transits built in Britain to 245 a day.

BC: Does all your planning run to 1980?

PL: All our present forecasts finish at 1980 but our planning is always for a full 10 years ahead. The whole Ford world operates on what we call "conference figures". There is a single massive planning conference each year for 10 years ahead, looking at every product the company produces throughout the world, and every market. From this our capacity planning is derived, and so investment is allocated worldwide on a priority basis — decisions, for instance, about whether we need a plant in the Congo or a transmission factory in Bordeaux.

BC: Coming back to more immediate problems as a finishing piece, are you confident about meeting the new requirements on noise, smoke and power-to-weight ratio?

PL: We are. Fortunately, we really haven't got any major problems there. The regulations are no embarrassment to us, and all our vehicles have been engineered to standards that will meet them without trouble.