AWD deal protects jobs
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• AWD says its record £46m export order to Zimbabwe will safeguard the jobs of AWD's 750-strong workforce and ensure that the Dunstable-based truck maker returns a tangible profit in 1991.
It will supply 2,000 Perkinsengined 13-tonne IL rigids to the Zimbabwe government. The first 500 will be dispatched complete, with the remaining 1,500 in kit form. These will be assembled in Harare by AWD./Bedford assembler Willowvaie Motor Industries.
According to AWD sales director Richard Mahan, the export order has provided much-needed volume for Dunstable at just the right time.
During 1990, AWD only managed to break even on its truck operations. "We need to produce 4,000 vehicles annually to get into sensible profitability," says Halahan. This export order guarantees an extra volume of 2,000 units, pushing our throughput up to 6,000. We've already gone through a cost reduction process and this order gives us a throughput that turns us into a profitable business.
"Without that extra volume," says Halahan, "we'd have been in a similar position to last year."
More details of AWD's export coup were revealed last week; the victory came in the face of stiff competition from Renault, Leyland Daf, Daimler Benz, Nissan and Hino. Strong support from the local High Commission, the DTi and the Overseas Development Agency helped AWD finish on top, says managing director Dr Michael Sanderson.
The ODA has funded 35% of the order, financed though an aid and trade provision grant.
"It's wonderful to see the British Government working with the British manufacturing industry to take on the best of the world and win," says Sanderson.
The order is part of an 8,000-vehicle replacement programme being conducted by the Zimbabwe government, and Halahan reports that AWD "...is already talking about the next deal".
There are also further sales opportunities for the company in Zimbabwe with the MTM-55 Multidrive truck, which is well suited to mining and logging work. The Zimbabwe export business has undoubtedly helped buffer AWD from the current decline in the UK truck market, as it will ERF, which is supplying 440 heavy tractive units worth more than 220m to Zimbabwe as part of the same ODA aid package.
Halahan reports that the UK truck market above 3.5 tonnes is likely to decline even further in 1991, possibly reaching the same level of business as the last recession in 1982.
"In our first forecast before Christmas we said that the 3.5-tonne plus market would reach around 50,000 units, but in the two-axle rigid sector alone the market is already down 30% during the first 20 days of January and we've revised back to 45,000 units this year," he says. "Where it goes after that we'll have to wait and see."