The Motor tricycle designed and built by Carl Benz took to the road for the first time in 1886, and the four-wheeled horseless carriage of Gottlieb Daimler followed in 1887. Those dates are generally accepted as being birthdays of the automobile., The motor car has come a long way from those pioneer days. Born in a small backyard workshop, it quickly matured to series production, soon to surpass modest artisan dimensions and to enter the of big business. The trend towards bigger and financially more powerful companies was evident almost from the begining, in order to obtain production and price advantages resulting from the so-called '
economies of scale'.
The motor industries rapid development has always created a tough competitive climate. Its history is an endless round of tales recounting victories and defeats, stories of famous and lesser names forced to give up the fight against overwhelmingly large, or more aggressive companies. The tales too were of names disappearing through liquidation, or as the consequence of mergers when new management sacrificed old-established marques for reasons of rationalisation, condemning them to oblivion.
Even to this day, there has been a merciless fight for survival between the various groups and companies. The year 1980 went down in automotive history as the year when Japan passed the U.S. motor industry into the lead of the 'Production Grand Prix'. For allmost three-quarters of a century, ever since the Americans replaced France as the leading automobile producer in 1906, most people had come to accept the USA as the world's premier car builder.
It was Professor Krish Bhaskar from England's East Anglia University who foresaw a market decline in Europe, North America, and Japan by the mid-eighties. In view of that, and the huge costs of developing the next car generation with more economical engines and fuel-saving bodies he considered an annual prooduction figure of two to three million units the absolute minimum for any corporation with the ambition to remain in the Major League on a world-wide basis. Professor Bhaskar predicted that only seven or eight corporations would make it to the end of the decade, naming General Motors, Ford, Nissan, Toyota, PSA (Peugeot-Citroen- Talbot), VW-Audi, Renault and Fiat as likely survivors. Thankfully he was wrong, and smaller marques continue in production, albiet with difficulty.
Of the two '
automotive fathers', Gottlieb Daimler undoubtedly made the greater contribution towards the development of the motor car. His 'high-speed' four-stroke engine of 900 rpm maximum was the first genuinely suitable for the task. A French entrepreneur, Maitre Edouard Sarazin, showed great interest in the Daimler engine, and he bought the licence for France, only to die soon afterwards. His widow then married one Emile Levassor, and set in motion the start of the French motor industry. The licence agreement between Daimler and Levassor proved very profitable for both parties, as Panhard & Levassor started to build motor cars with V2 Daimler engines in 1891, soon to achieve production figures much higher than Daimler in Germany.
Peugeot, and later Mors, also used Daimler engines. The French welcomed the automobile with much greater enthusiasm than did initially the Germans, business was booming, and it was in France that motor car production first moved from workshop construction to industrial dimensions. Undoubtedly, the French motor industry dominated worldwide until 1906, and the European scene at least until the Kaiser War. Gottlieb Daimler's interests were not, however, limited to Germany and France. In 1896 the last residues of the Red Flag Act - the four mph (6.7 km/h) speed limit was abolished in Britain. Formerly, that act even stipulated that a man with a red flag had to precede any horseless carriage on the road, in order to warn man and animal of impending dangers. In that memorable year, the Daimler Motor Syndicate was set up in Coventry. Harry J. Lawson, an English industrialist, and Gottlieb Daimler were directors of the company which produced Daimler V2 engines and built very solid copies of the French Panhard & Levassor car.
The Coventry Daimler
The Coventry Daimler, as it was then called to distinguish it from the German-built Cannstatt Daimler, soon accquired a first-class reputation and a distinnguished client, King Edward VII. The German connection did not last very long, and as early as 1910 the British Daimler company became part of the Birmingham Small Arms Group (BSA). Just before the turn of the century, serious contacts were established by Gottlieb Daimler with Austro-Hungary, and the colourful figure of Emil Jellinek, Austrian Consul in Nice, entered the scene. He sugggested the construction of a much faster Daimler of more sporting character. Gotttlieb Daimler's closest collaborator, Willhelm Maybach, carried out the design work, whilst Jellinek not only contributed the idea and the money, but also the name of his daughter: Mercedes had arrived!
The Austrian connection led to the acquisiition of a share in the engineering works of Fischer, Bierenz & Co., of Wiener Neuustadt, near Vienna. It was soon renamed Osterreichische Daimler Motoren Gesellsschaft and run by Gottlieb Daimler's son Paul. When the latter was recalled to Gerrmany, a certain
Ferdinand Porsche was apppointed Technical Director. Porsche had made his name with Jakob Lohner, both coachbuilders to the Austrian Imperial Court. There, Porsche had built several revolutionary cars, some with mixed elecctric drive. Lohner became Austria's fore-most manufacturer of military aircraft durring the First World War and built Lohner motor scooters in the 'fifties, but never again a motor car after Porsche left. Ferdinand Porsche's contributions toward the development of the motor car are too well documented throughout thie Unique Cars and Parts site, so to avoid repetition, let it be said that he soon became chief execuutive of Austro-Daimler. In a rather more humble position, a young Croat worked for Austro-Daimler at the same time, just before the Kaiser War. His name was Josip Broz, later to become famous as Marshal Tito of Yugoslavia.
The collapse and disintegration of the Austro-Hungarian Empire and the sad ecoonomic conditions of the inter-war years made themselves felt at Austro-Daimler. The great depression forced a merger of the Austrian motor industry under the name of Steyr-Daimler-Puch AG., which spelt 'out' for Austro-Daimler as a marque name ... until a clever Chinese marketing strategist working for Steyr-Daimler-Puch's Ameriican subsidiary in the 'seventies used that traditional name to launch a luxury bicycle on the U .S. market. He clearly saw that the marque name 'Puch' would not be quite appropriate for an up-market product in view of the unfortunate phonetic affinity of push bike and Puch bike!
France at the Zenith
We left the Societe Anonyme des An6ens Etablissements Panhard & Levassor at the time they began to use the Daimler patents. In 1881 the company launched a very moddern front-engined car design, the 'systeme Panhard', which meant a great step forrward in the development of the motor car and really marked a complete breakaway from the early horse less carriage. Large sales and racing successes made
Panhard and Levassor the leading make not only in France, but Europe, at about the turn of the century. However, the company remained ahead of the competition a slowly but surely its leading position was eroded. After the Second World War, the company produced nothing more than a small front-wheel-drive saloon with an aircooled twin engine. Those small Panhards scored many
Le Mans index wins, but their commercial success remained so modest that the company was soon taken over by Citroen and the once-famous name of Panhard was quietly phased out.
The First V8
The main competitors in that era of French dominance around the turn of the century were Peugeot and de Dion Bouton. The latter company company built complete cars that sold well all over the world as well as its own engines which were often sold to foreign car producers for use in locally design chassis. The de Dion Bouton company built the first V8 engine in automotive history. In the 'twenties, the company fell behind competitors, and the last de Dion Bouton V8, left the works in 1930. The old Count Albert de Dion died in 1946, an only a rear axle design survived as a reminder of that great motoring pioneer.
Another major French marque of the era was Darracq. In 1904 a Darracq car wrote motoring history by setting up a new
World Land land Speed record. The company looked across the frontiers quite successfully. Opel built Darracq cars under licence (the Opel-Darracq models), and Darracq Italiana was set up, first in Naples, later moving to Milan. That subsidiary ran into difficulties in 1910, changed owners and soon afterwards its name, to become
Anonim barda Fabbrica Automobili, shortened to ALFA, and not much later became Alfa-Romeo! The French parent company, Darracq in France, was later taken over by Lago-Talbot which thrived in the 'thirties and enjoyed a period of great sporting success just after the Second World War, before it had to take refuge under Simca's umbrella in
1958.
Simca was a relatively young enterprise with Fiat participation, assembling models in France, and later elaborating on basic Fiat designs. In the 'fifties Simca chased the French Ford factory where bigger V8-engined cars of semi-American character were built. When Chrysler decided to tackle the European market Simca was taken over to become the prize possession of Chrysler-Europe. Another reason for its acquisition was that it had a foothold in the promising Spanish market through its subsidiary, Barreiros.
In
Britain, Chrysler took over the Group which had originated from a merger of
Hillman,
Humber, and
Sunbeam-Talbot in the early 'thirties, and to which was later added
Singer, Coventry manufacturer light and sports cars. Yet the late 'seventies brought tremendous difficulties for the Chrysler Corporation which led the American giant to the brink disaster. In order to survive in America, European subsidiaries had to be sold. They were taken over by the PSA Group, behind which abbreviation we find the old established name of
Peugeot. The tradiiral French make which had started by using Daimler engines well before the turn he century, had remained a rather conservative company without any signs of excessive entrepreneureal aggressiveness. Then suddenly its policy changed. When
Citroen ran into difficulties during the first oil crisis, just after its brief unconsummated marriage with Fiat (which was soon annulled), Peugeot took command of Citroen. Peugeot's next step was an ambitious engine project, a joint venture with Renault and Volvo, then followed the surprising Chrysler deal which made headlines all around the world.
France's Scorched Earth Policy Following World War 2
PSA acted quickly and with determination. The nominal integration of rather heterogenous Chrysler-Europe programme followed with lightning speed. The old marque name of Talbot was dug up found to be the ideal common denominator, having traditional roots both in Rootes and Simca history, and sounding equally well in French and in English. A remarkable story of a renowned name's resurrection in the days of automotive shotgun weddings!
And
what happened to the numerous French luxury car builders that survived the Second World War? Names like Hotchkiss, Salmson, Delage, Delahaye, Bugatti? Post-war French fiscal policy penalizing large engines and causing very high petrol prices, very effectively drove them all out of business by the early 'fifties. It was like a scorched earth policy. Thus, apart from the rous PSA Group, only the solitary Regie Renault remained in France. Founded around the turn of the century, it was natonalized in 1945 following collabora-charges with Hitler's Germany. The fact that Renault had remained solitary indicated a particular problem to be found amongst nationalized car producers. In an era where it became imperative to establish links across national borders, nalization prevented just that. The problem also existed for British Leyland and Alfa Romeo. Sadly, it was BL that never made the distance.
America's Break-Through
The United States neither invented the automobile, nor welcomed it with open arms at infancy. The first statistical data on car production date from 1902. In that year, 314 automobiles were built in the US, whilst France produced 23,000! But it is the unparalleled talent of Americans to translate new inventions and technologies into industrial use. Four years later, America passed France into the lead of the worldwide '
Production Grand Prix', building 58,000 units.
Then two events occured in 1908 that were to be of lasting significance in the progress of automobile history.
Henry Ford introduced his
Model T to a market which hitherto had only seen costly toys for the super rich. 'Basic Motoring' had arrrived, the simple, rugged mass-produced car at an unprecedented low price opened the door to new dimensions. The American farmer discovered the automobile. Not content with one major event, 1908 also saw the formation of General Motors by William C. Durant, then President of the Buick Motor Company. Long term, that second event proved to be of equal importance as the launch of Ford's Model T, although short term the impact was infinitely smaller. Durant had the vision of annual production figures exceeding one milllion units, and he clearly saw the necessity to form a truly vast corporation with the requisite financial power. That, he felt, could be achieved only through a merger of the majority of motor manufacturers.
By 1910 he was able to bring together
Buick, Olds (later
Oldsmobile), Oakland (later
Pontiac),
Cadillac, and seven other compaanies within the framework of General Motors. Each one of the four great makes was to retain its identity and to work as a division of the corporation with a considerable degree of autonomy. Later, the
Chevrolet Company, created by the Swiss racing driver Louis Chevrolet, joined General Motors to become the most important diviision of the Group, with the assigned task of competing head-on with the market leader, Ford, in the low price field.
A sophisticated marketing concept assigned each make certain dimensions and price brackets, so that a young owner of a Chevrolet could remain faithful to General Motors as he climbed up the ladder to accquire larger and more expensive automoobiles. So from the cheapest 'Chevy' to the most expensive Cadiliac, GM offered a car for every purse, making it very difficult for the competition to tempt customers away. The system went so far that in 1927 an addiitional marque, La Salle, was invented to close the only remaining gap, between Buick and Cadillac. The move may have been too much, however, and La Salle quietly disappeared from the arena when war production stopped and made way for car production in 1945.
Planned Obsolesscence
The General Motors system was suppleemented by the strategy of the annual model change which resulted in 'planned obsolesscence'. Also, GM recognized the eminen t importance of the used car market at a very early stage, and paid great attention to the quality and quantity of its dealer force.
It is hard to visualize two systems more different than those competing for first place in the American market, Ford and General Motors. The self-made man and autocrat (Henry Ford) had built a vast empire mainly as the result of the Model T's success and his advanced production methods. His company was centrally organized, owned by the Ford family, and was proud to be able to 'not go public' but it finally happpened in 1947. Ford policy promoted mass motorization, low price, model stability, and led the Ford Motor Company to the forefront, as the premier car producer of America, and the whole world.
All the power and influence of men like Pierre S. Dupont and J. P. Morgan with their Wall Street roots, and the sophistication of the General Motors Corporation's strategy was of no avail. Ford could not be successfully challenged, at least not for the time being. Certainly not before a signifiicant change occurred in the American market place. Until 1908, America was a class market, with the automobile a toy for the well-to-do. With the advent of the Model T, it changed to a mass market, where the cheap product took the lead and left the competition far behind. In the mid-'twenties, however, changes took place that Henry Ford quite obviously had not foreseen, explaining why he so rigidly adhered to his old and proven concept.
Suddenly, the Model T ceased to be attractive. Basic motoring arrived at its saturation point, for now all the farmers owned their own Model T's. America's car park had grown so large that an important used car market emerged quite naturally by the mid-Thirties. And the used car was the most serious competitor to the new car of the 'basic motoring' concept. The ageing Model T Ford was simply being overtaken by techniical developments and the march of time. Whilst Henry Ford appears to have stood aside with a certain lack of comprehension as to why the bottom fell out the Model T market, General Motors moved into the fast lane to overtake Ford and become autoomobile producer No. 1. The Ford Motor Company, however, was still strong enough to overcome its 1927 crisis by its own means, and it was successfully able to challenge GM's production lead in three isolated years, but by and large, a new pattern had emerged which remained for roughly half a century: America's industry meant the Big Three, General Motors - Ford - Chrysler, strictly in that order.
Today, America's automobile industry finds itself in a most precarious situation. It has clung to the huge 'full-sized' car with its vast 'gas-guzzling' V8 engine far too long, refusing to read the writing on the wall. It has refrained too long from seriously developing and promoting more compact and economic cars; all their previous efforts in that direction have been at best half-hearted. The situation opened the door first to the Europeans, then to the Japanese, and the once tiny 'small car niche' quickly become a breach amounting to one quarter of car sales in the U .S. market! Under the impact of the energy shortage, very expensive rethinking was inevitable. U .S. legislation forced the industry to invest vast sums of capital to conform first with safety regulations, then with anti-pollution requirements, and later with the need to drastically conserve energy. It wrought havoc with the finances of the automobile industry.
Since the market for full-sized American cars dramatically collapsed, it was becoming even more difficult to finance the requisite investments of really horrendous dimensions. Once again, the effect of economies of scale became apparant, greatly favouring the Big Ones. In 1979, General Motors produced roughly five million cars in the United States and still managed to make a small profit. The Ford Motor Company suffered very considerable financial losses with a production of two million units, whilst Chrysler's production figure fell below the one million mark, and without government guarantees, the commpany would have clearly gone to the wall. For over half a century the world had become used to GM's five divisions holding an unassailable lead, with the Ford Motor Company (including its two upmarket makes, Mercury and Lincoln), as the powerful No. 2 contender. Chrysler pursued a concept not unlike that of General Motors, incorporating four makes,
Plymouth,
Dodge, De Soto as well as Chrysler itself.
The small independent American manufacturers that survived the depression exxperienced a short period of prosperity in the sellers market of the immediate post-war years. Their technical and aesthetic contributions to the development of the Ameriican automobile were more important than their modest market share, and certainly proportionally greater than those of the Big Three which continued to mass-produce very orthodox cars. The moment the situation reverted to a buyers market, however, the small companies came under heavy pressure once again. Nash and Hudson had to merge to form the American Motors Corrporation. Newcomers to the car business, Kaiser-Frazer, fared worse and soon had to discontinue car production. Much sadder was the fate of the proud prestige make,
Packard, that had built cars to a very high technical standard. In severe financial difficulties Packard merged with Studebaker, a company of outstanding styling achievement.
Unfortunately, two beggars can only pity each other; help can come to them only from a rich man, who sadly failed to apppear. Thus Studebaker-Packard went out of business. The car manufacturers of the smaller Euroopean countries were forced to give up much sooner than the small companies in the vast American market. The once thriving Belgian motor industry was certainly bigger than that of ltaly in 1904, achieving its prooduction record of 12,000 cars in 1906. It has long ceased to exist, and there are only asssembly plants of foreign multis in the counntry. Forgotten are names like Minerva, F. N., and Metallurgique. Of the more than thirty makes once built in Switzerland, only Saurer and Berna were able to conduct an orderly withdrawal into the more speciaalized field of heavy commercial vehicles. The last private car built in Switzerland was the Martini (1934); excluding of course the brave Peter Monteverdi, of Basel, who had the courage to start to hand-build luxury cars in extremely limited numbers.
The Italian Motor Industry
The Italian motor industry had developed in a way very much different from all others. Car construction started rather late, and the Fiat Company immediately established the extremely dominant position which it still holds today. The dominance left only marginal areas - sports and luxury cars - for the competition. Of the glorious names of the early days, the saddest losses have been the disappearance of Itala and Isotta Fraschini. Another elite make,
Alfa Romeo, managed to survive as a nationalized industry. Having drastically changed its model range to more accessible price brackets, it has in fact become a large series producer. However, the political necessity to industrially develop Southern Italy imposed the burden of setting up the
Alfasud factory which never managed to operate profitably.
Fiat's international importance was based on long-established preparedness to negotiate participations and co-operative agreements of various natures and with great flexibility. In earlier times, NSU-Fiat, and Austro-Fiat come to mind, later came Simca and SEAT (Spain), and there were important subsidiaries in Argentina and Brazil. Comprehensive co-operation packages existed with a number of East European countries, which led to the production of Fiat models and derivatives in the Communist Bloc. More than half the cars produced in the Soviet Union were Shiguli (Lada) from Togliattigrad, based on the Fiat 124 and built in a giant plant set up by Fiat for the Soviet government. In Poland, Pomo built Polski-Fiats; in Yugoslavia, locally built Fiats were called Zastava. Thus, the Comecon countries plus Yugoslavia built more than one million Fiat-based cars per annum, about as much as Fiat's indigenous production in Italy.
Developments in Germany took an entirely different course. Between the wars, the Americans were able to obtain a very dominant position. Adam Opel AG., then market leader in Germany, was bought up by General Motors in 1929, and Ford set up a large factory in Cologne. Sensing the American challenge, DKW; Wanderer, Audi, and Horch came together to form the Auto-Union Group. It was to provide a complete model range, from the cheap two-stroke DKW up to the luxurious Horch limousines, competing with the Americans in the mass market and with the prestige make of Mercedes-Benz (Daimler and Benz had merged in 1926!) at the top of the line.
For almost a decade, Auto-Union and Mercedes-Benz duelled in the classic Grand Prix races to enhance their own prestige as well as that of Germany, writing the most exhilarating chapter in racing history. After the Second World War, Auto-Union bore the full brunt of defeat and the partition of Germany. The Chemnitz, Zwickau, and Zschopau works in Saxony found themselves in the Soviet zone of occupation. Those factories were, of course, nationalized and production soon centred around the small two and three-cylindered IF A cars, which so closely resembled DKWs. For a fleeting moment there were plans to build a luxurious East German Horch Sachsenring. In the Dixi factory at Fisennach, which had belonged to BMW - where some years before,
Austin Sevens had been built under licence - the beautiful BMW 327 was revived under the new name EMW. But in the long run, all those East German nationalized factories amalgamatted and production concentrated on
Trabant and
Wartburg models with two-stroke engines of unmistakable DKW origin!
In view of those losses, Auto-Union was able only to re-emerge on the German marrket in 1949. The Ingoldstadt works in West Germany started production of the front-wheel-drive two-stroke DKW, all other marque names remaining dormant. Gone were the days when Auto-Union had aspiirations of becoming Germany's premier motor manufacturer, that position was firmly held by the then new giant, Volkswagen. At the beginning of the 'sixties, Daimler-Benz acquired a dominating share of Auto-Union, where two-stroke engine limitationsin a new era of greater prosperity were understood. The target was a quality sub-Mercedes dimensions. Thus, a front-wheel-drive car with a new advanced four stroke engine was developed and the traditional name Audi resurrected.
At that point it is appropriate to cast a backward glance to the pioneer days of motoring. August Horch had worked for Carl Benz in Mannheim from 1896 till 1899, then set up his own company in Cologne. August & Co. soon moved to Zwickau, but differences of opinion with his business partners soon arose. August Horch quit the Company and immediately set up a new venture the same city. However, a court injunction prevented him from further use of his family name. He may have been a difficult business partner, but he certainly was a motoring engineer and full of ideas. His family name Horch means 'listen!' in English, or 'audi' in Latin, and classical education still counted for something in the Kaisers Germany!
Availability of the new Audi greatly interested Volkswagen, where the good old
Beetle was becoming rather long in the tooth. A deal was struck between Wolfsburg and Untertiirkheim in 1964/65, and control of Auto-Union passed into the hands of VW. To stop the 'beetle gap', however, yet another take-over was necessary in 1970. The NSU Company not only controlled the patent rights for the Wankel rotary engine, but also had a medium-sized saloon ready for production. The company was amalgamated with Audi, to VW's Audi-NSU Division, and the NSU car was built and marketed under the name Volkswagen K 70.
Not aII motor manufacturers were prospering continuously during the boom years of German recovery. Two car producers of considerable repute were on the verge of bankruptcy by 1960. The
Borgward Group of Bremen which also built Goliath and Lloyd cars was soon to be liquidated, Borgward's contribution to basic motoring in an post-war years, in the shape of the minicar, is almost forgotten today. BMW of Munich, on the other hand, did not give up the fight for survival. The immense loyalties amongst dealers as well as customers in Bavaria and all over the world formed the base for a remarkable recovery.
With
new capital, new management, and soon a new model range, BMW managed an astounding come-back. Thus, the German motor industry has became condensed into one giant group, VW-Audi, three specialist car builders (Daimler-Benz, BMW, and the small but famous Porsche Company), plus the GM and Ford subsidiaries with extensive production ties in Germany.
England was the country of the steam engine and the railway. As early as 1831 there were efforts to set up a network of roadbound steam omnibus lines. That proved abortive as the Red Flag Act gave such an enormous speed advantage to the railway. Although the man with the red flag was no longer required after 1878, the four mph speed limit remained effective until 1896. Such points must be borne in mind when analyzing the question of why the motor car and the internal combustion engine were rather late in conquering the British Isles.
Dr Frederick William Lanchester built the first British motor car in 1895, but he and his brother George did not start regular car production until 1900. Previously, Dr Lannchester had been active in the field of aviation. He was brilliant yet perhaps somewhat eccentric, never copying an idea from another design, and never being copied by anybody else. There was a Lanchester car with disc brakes in 1902, and Dr Lanchester was ahead of his time in many other ways. The company bearing his name was soon linked with Daimler under the BSA bannner, and Lanchester cars continued to be built until 1957.
The English are, of course, great individualists, and that very fact permitted a vast number of small British car manufacturers to survive independently much longer than their counterparts in America or in continental Europe. The belated trend towards concentration is one of the main causes of the difficulties the British motor industry would experience through the 1970's and 1980's. A minor early wave of mergers was touched off by the great depression under the influence of the shining General Motors example. Bentley was taken over by Rolls-Royce in 1931, and a year later the Rootes Group was formed through a merger of Hillman, Humber, and Sunbeam-Talbot. Soon afterwards, Lord Nuffield (formerly Mr William Morris) created the Nuffield Group consisting of
Morris,
MG,
Wolseley,
Riley, and S.U. Carburetters. Nuffield's most serious competitor was
Herbert Austin, the two rivals together accounting for 60 per cent of British car production in the thirties.
The Americans, however, made serious inroads into the British market when Ford set up a big factory in Britain, and General Motors developed
Vauxhall, which they had taken over as early as 1925. The post-war boom made Britain the world's largest car exporter, a situation that may well have blanketed some of the strucctural weaknesses of its industry. Not until 1952 did the two main British volume car-producers, Austin and Nuffield, join hands to form the British Motor Corporation (BMC) yet retaining separate identities and dealer networks in Britain. The brilliant Anglo-Greek chief engineer Alec Issigonis designed some revolutionary small cars, particularly the
Mini, but the financial strength of BMC always remained somewhat restricted.
The Leyland Company would become the largest producer of commercial vehicles in Britain, they returning to private car production by taking over Standard-Triumph in
1961. A year later, Assoociated Commercial Vehicles was added to the Leyland Group, and in
1967 Lord Stokes was able to take over the
Rover Company. When the British Motor Corpooration, which had merged with
Jaguar (which included Daimler and Guy Motors) to form British Motor Holdings, was beset by very serious financial troubles, Lord Stokes with his good Labour Party connections appeared to be just the man to carry out the government concept of a strong and unified British motor industry. The result was the
1968 merger of Leyland and BMH to form British Leyland. The much publiicized and truly colossal difficulties to effecctively integrate such a vast and heterogenous collection of companies without adequate financial resources led to nationalisation in
1975. Frequent top management changes resulted in a series of different organisational concepts (essentially centralisation versus de-centralisation), and the lack of modern volume car models increased the company's problems to the point of collapse.
The necessary renewal of the model range could not be carried out at the requisite speed without resorting to co-operation with an outside partner. Enter Honda - and Japan thus gained its first bridgehead in a major industrial country of the European Community. Other Japanese companies followed, building or assembling cars in the heartland of Europe, the way they had done in Taiwan, the Philippines, South Africa, Latin America and of course here at home in Australia.
