The Fall of The British Car Manufacturing Industry

It is difficult not to notice how few of our contract hire and lease cars are British. Where did it all go wrong and what happened to the 1,000,000 workers that were once employed in the UK car manufacturing industry?

It would perhaps be too simplistic to just say that the car industry was destroyed by the unions, although they certainly played a very major role in its collapse, which is ironic really when you consider the number of jobs and families that depended on the car industry for their livelihood. Poor management also played its part as did the governments of the day.

Whilst foreign car makers were getting their act together in terms of build quality, reliability and service, the British car manufacturing industry was slowly imploding. In the 1970’s the industry was effectively in the control of the unions. To avoid industrial action cars were allowed to go out to dealerships in a faulty condition, as finding fault with too many cars coming off the production line resulted in further walkouts.

1974 was probably a low point for the car industry, indeed for the country, with an extraordinary 2,922 industrial disputes across the country. The government had to enter into discussion with the union leaders on a whole variety of subjects, if they took action without consultation with the unions; they did so at their peril. The unions were becoming more powerful than the government. There was however a shock waiting for them, in the form of Margaret Thatcher.

It seems strange now looking back, that no one amongst the union leadership appeared ask themselves the following question; why will the public continue to buy British cars, when the quality is poor, the residual values are terrible, delivery is unreliable, the service is indifferent and maintenance is costly? Well the answer was they won’t and they didn’t; foreign manufacturers started to get the upper hand, some would say it was handed to them on a plate. British vehicles abroad, particularly in the US, went from being seen as prestige cars, to being a serious liability which were to be avoided.

Although there is nothing new about car leasing in the UK it was previously very difficult for lease car companies to achieve what is basically the crux of contract hire; to offer a client fully budgeted costs over a two or three year term. How could they achieve that when British cars had just a one year warranty and were constantly going wrong?

Things are very different today British cars once again have a good reputation but how has that been achieved? Essentially through foreign ownership; imagine telling someone in the 1940’s that Rolls Royce would one day be owned by Germany’s BMW or that Bentley would be in the hands of Volkswagen, what would they have thought? Lotus was very British but it is now part of Malaysia’s Proton and Aston Martin that was even more British and supplier of cars to Royalty is controlled by an Islamic group, Investment Dar. Even Land Rover and Jaguar are owned by the Indian group Tata.

There is the Bristol, a company hardly anyone has heard that is a thoroughly British car manufacturer and they have been manufacturing cars since 1946. They produce the Fighter a true Super Car by any measure and a league apart from the more run of the mill Ferrari or Lamborghini. Interestingly their cars can only be bought from their one showroom in Kensington West London, they do not advertise and will not allow motoring journalists to test their cars and yet they have survived.

Some observers say it was inevitable that many of these British manufacturers would be taken over in today’s global business market but far fewer few of the manufacturers in other European countries have been taken over in the same way.

A very positive result of these takeovers is that British jobs have been preserved, not only jobs with the manufacturers but also with the many suppliers to the motor industry and realistically there was no other way these companies were going to survive.

What is the future for the British car industry? Will it regain its market share and become a dominant player once again, with more of our car leasing clients opting for British contract hire cars? Realistically that is very unlikely, they lost market share to manufacturers like Nissan; BMW and Audi, which are very powerful competitors and they will do whatever is necessary to retain their share of the car leasing market.

Should you have any queries or questions with regard to Commercial Fleet Management, or vehicle Hire Purchase, please do not hesitate to contact us. Bowater Price plc 01494 536 536. www.bowaterprice.com.

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