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UK car industry now Germany’s biggest asset

27 August, 2013

The UK car industry was once one of Germany’s biggest competitors; now it has become one of its biggest assets, says author Dominic Sandbrook. How did Germany accelerate away?

Forty years ago, Germany’s biggest carmakers were putting the finishing touches to a product that would change their image forever. The Volkswagen Golf is one of the bestselling cars of all time. It made its debut in 1974, the year West Germany won the World Cup at home in Munich and the German band Kraftwerk released their ground-breaking album Autobahn. Ever since, the Golf has been shorthand for mass-market success. Last year VW sold more than 430,000 Golfs all over Europe – a staggering 125,000 ahead of its closest rival. This year they brought out a brand-new, seventh incarnation. And even if you don’t own one yourself, there’s undoubtedly one in a drive near you.

It is, of course, a very familiar story. German manufacturing is one of the great success stories of the post-war age. Little wonder, then, that 21st-Century Germany probably commands more raw economic and political clout than any time in its peacetime history. If you want to know why Angela Merkel calls the shots in Europe, Germany’s car factories are a pretty good place to start.

By contrast, Britain’s car industry is a shadow of its former self. We do still make almost one and a half million cars a year, which is good news for thousands of British engineers. But these days, we make them for other people.

The iconic Mini plant at Cowley, for example, is celebrating its centenary this year. It was founded in 1913 by the entrepreneur William Morris as the home for his legendary Morris Oxford. Today it still makes thousands of cars – but it makes them for BMW. It’s a similar story at Crewe, the home of another great British icon, Bentley – which actually belongs to Volkswagen.

Half a century ago, let alone when Morris was at his peak, this would have seemed unimaginable. But the sad truth is that Britain’s car firms only have themselves to blame. Seventy years ago, at the end of World War II, Germany was on its knees. After the fall of Hitler’s empire, its car industry lay in ruins. In August 1945 the British Army sent a major called Ivan Hirst to take control of the giant Volkswagen plant in Wolfsburg, which had been built under the Nazis to produce ‘people’s cars’ for the German masses.

Ignoring his sceptical superiors, Hirst could see the potential amid the shattered debris of the Wolfsburg factory. Rebuilding Volkswagen, he thought, would be a step towards rehabilitating Germany as a prosperous, peaceful European ally. And of course he was right. In the next few years, Hirst restarted production of a car we know today as the Beetle. And from then on, VW was flying.

By the late 1950s, with production up and employment buoyant, West Germany was enjoying an economic miracle. The memories of Nazism were banished, and the Germans began to rebrand themselves as a forward-thinking, hard-working and supremely modern industrial nation.

In the meantime, Britain was coasting in the glow of the affluent society. For decades we had been one of the world’s great car-making nations. And yet, slowly but surely, the wheels were beginning to come off. The men who ran our car firms – men like William Morris, who became chairman of the newly merged British Motor Corporation (BMC) at the age of 74 – were elderly and autocratic. Instead of embracing new technology and tapping the expanding European markets, they shrank from continental competition and preferred to sell cheap cars to Britain’s former colonies.

Even the most celebrated British car of all – the Mini, launched in 1959 – was a reflection of our industrial and imperial decline. With fuel prices rocketing after Britain’s disastrous bid to recapture the Suez Canal from Egypt in 1956, BMC’s designers had been told to produce a car that was smaller and required less petrol. And although the Mini was an enormous hit, there was a sting in the tail. BMC actually lost £30 for every car it sold.

Far from being a symbol of Sixties cool, therefore, the Mini was really a symbol of something rotten at the heart of Britain’s economy. It was a brilliantly designed metaphor for an industry crippled by complacent leadership, dreadful salesmanship and a fatal culture of self-satisfaction.

All the time, Germany’s car industry went from strength to strength. Crucially, it enjoyed excellent labour relations – a stark contrast with the pitched battles in many of Britain’s troubled car plants.

Europe’s favourite brands

Brand Market share
SOURCE: ACEA JULY 2013
VW 12.5%
Opel/Vauxhall 6.9%
Renault 6.5%
Peugeot 6.2%
Audi 5.6%

 

In Germany, management and unions worked closely together in the interests of the common good. Indeed, by law all major German firms are required to set up Works Councils, where the bosses and the unions must work together ‘in a spirit of mutual trust’.

In Britain, by contrast, car factories in the 1960s and 1970s became daily battlegrounds, where militant shop stewards and complacent managers fought out an overt class war. One fact probably says it all about the difference between Britain and Germany in the post-war years. In 1978, for every day that German manufacturers lost to industrial action, we lost ten.

By the time Margaret Thatcher came to power a year later, the game was probably up for Britain’s car industry. Drivers were already switching to foreign motors – not least German models such as Mercedes, Porsche, Audi and, above all, BMW, which mastered the art of high-end branding.

In 1994 BMW bought the last remnant of British mass car production, the Rover Group. A year later, in the film Goldeneye, Pierce Brosnan’s James Bond was even equipped with a BMW Z3, supposedly fitted with Stinger missiles. By now, cars had become the ultimate metaphor for Germany’s extraordinary industrial revival – and for the collapse of much of Britain’s manufacturing industry.

Today the results are all around us. Thanks in large part to the success of its manufacturers, Angela Merkel’s Germany is the biggest economy in Europe and the fourth biggest in the world, as well as the world’s second largest exporter.

It is little wonder, then, that while Britain ran a whopping £120bn budget deficit in 2012-13, the Germans managed to run a small surplus – as they have done so often in recent years. And it is little wonder, either, that amid the terrible turmoil in the capitals of the eurozone, the Germans have ended up calling the shots.

From Britain’s perspective, the tragedy is that we always had the skills. But we lacked the right management, the right unions, the right priorities, and, quite frankly, the right work ethic. And in the end, we paid a heavy price.

There is, of course, a bright side. We do still make more than a million cars a year, providing jobs for thousands of British workers. Even during the eurozone crisis, British car production has continued to grow, while German production actually fell last year. But there’s no escaping the fact that the Germans still make more than four times as many cars as we do. And what happens to the profits from all those Minis and Bentleys of which we’re so proud? They end up in Wolfsburg and Munich.

Once our car industry was one of the Germans’ chief competitors. Now, it has becomes one of their biggest assets.

Half a century ago, they were on their knees. Yet through grit and dedication, they worked their way back. And now, from their car showrooms to their national finances, the Germans are the envy of the world. To be honest, I rather admire them for it.

Dominic Sandbrook is the author of several history books about Britain in the 1960s and 1970s, including White Heat, State Of Emergency and most recently, Seasons In The Sun

VW Golf – car of the year or car for generations?

14 July, 2013

In April this year the Volkswagen Golf was named World Car of the Year. Spekaing about this accolade, Professor Dr Martin Winterkorn, chairman of the board of management of Volkswagen, said: “To win this award again shows that the Golf is and remains in a class of its own all around the wrold. This car sets new benchmarks again and again, not least in terms of efficiency and environmental credentials. Soon, for instance, the Golf will also be launched as a plug-in hybrid and as a 100% electric car.”

In giving their reasons for the awards, the jury said: “The Golf is just the right size – it’s spacous, practical and comfortable.  It has a fresh, progressive design, a new range of engines, plus an impressive list of equipment and safety systems.  If there is a car for everyone, the Golf is it.”

In May Golf BlueMotion was launched.  No matter which engine you go for, it will come with BlueMotion technology that includes a stop-start system and brake energy recuperation as standard. This helps to keep emissions low and fuel economy high – especially with the full BlueMotion model, which returns hybrid-beating economy figures of 88.3mpg and emits just 88g/km of CO2. The entry-level 1.2 TSI manages 57.6mpg and emits 113g/km, while the 1.6 TDI does 74.3mpg and emits a road tax-free 99g/km of CO2. But even the performance models should be fairly cheap to run, as the Golf GTD claims fuel economy of 67.3mpg and CO2 emissions of 109g/km (that’s 12mpg and 20g/km better than the old car and almost exactly the same figures as the first-generation Golf BlueMotion), while the Golf GTI is said to return 47mpg with the standard six-speed manual gearbox, and CO2 emissions of 139g/km. Prices are competitive, too, while residual values should be very strong. While BlueMotion is setting new standards in terms of fuel consumption and environmental compatibility, all the Golf’s traditional attributes of practicality, comfort and safety are still there.

Park it at John Austin’s

24 March, 2013

Here are ten good reasons why you should park your car at our garage for a service, MOT or repair:

  1. Over 40 years’ experience repairing and servicing vehicles
  2. No-fuss reception area means you pay for our skills not the frills
  3. ‘Buy with Confidence’ accreditation from Essex County Council Trading Standards
  4. Our customer loyalty schemes (‘Pass it on’ and ‘Rewarding Service’) will save you money
  5. Free pick up and drop off service for local customers
  6. Courtesy cars available – including our very popular Audi TT!
  7. Pop in any time for a FREE health check.
  8. If you have a car related question or query, or just want a price, just call and email us; we’re here to help
  9. We welcome all makes and models
  10. We can help you save money, stay safe and keep your car on the road

Here’s to 2013!

27 January, 2013

Well we all made it, we got through the snow and Blue Monday now the team at John Austin is welcoming 2013 with open arms.  Last year was such big year for the country, with the Diamond Jubilee and the Olympics – we certainly all felt inspired by it here.

But it was also a big year for us too; we ran our quarterly Pit Stop Workshops, opened our MOT centre, erected amazing signage opposite the Marks Tey roundabout (so you really can’t miss us) and introduced our customer loyalty and customer referral schemes.   Then late last year we were proud to be finalists in the Essex Business Awards for Customer Service. We believe this year will be just as eventful!

If you’d like family and friends to learn about basic car maintenance, you can book them onto one of our Pit Stop Workshops; please can you call Paul on 01206 211483, or email me on and we’ll take the details. You can read more about past workshops on our blog: http://johnaustinaudi.wordpress.com/2012/08/13/pit-stop-workshop/

If you’re not already enjoying the benefits of our loyalty schemes, please ask Paul about them when you’re next at the garage.  Here’s a summary: ‘Rewarding Service’ entitles you to a free air conditioning service when your rewards card is complete.  There are 20 stamps on the card and you ‘earn’ a stamp for every £20 you spend; but you don’t even have to use it, you could give your completed card to a family member or a friend to redeem.

‘Pass it On’ will give whoever you hand this card to (providing they are new to John Austin, not a current customer) a 10% discount on their first service or repair with us.  As you referred a new customer to us, you’ll receive a 20% discount on your next service or repair – and it CAN be used in conjunction with any other discount promotion we’re running.  If you’re not already involved, you should be.

And finally, we’re going to be sending out our customer satisfaction survey by email in future;  we hope you won’t mind completing it, it’s the best way of finding out how we’re doing and whether we’re meeting your expectations not.  We’re not looking for pats on the back – although they’re always welcome – but information to help us give you a better service.

Tis the season to be careful

11 December, 2012

It’s not just the TV that breaks down at Christmas, but please make sure it’s not your car.

Here are three actions you can take now to make sure you and your family can enjoy the festive season:

1.  Cover the bases.  If the weather forecast is looking bad or just uncertain and you need to drive, then make sure your tank’s full; if you get stuck in bad weather you can keep the engine running and stay warm until help arrives or conditions become less severe.  Having the right tyre pressure is vital whatever the weather, but in wintry conditions check the tread: the legal minimum is 1.6mm, but it’s better to have a deeper tread of at least 3mm, as it will be more effective at clearing water.  If you haven’t put antifreeze in your car since the summer, now’s the time to do it.

2.  See and be seen.  The combination of icy conditions and grit on the roads means you’ll use more screen wash than normal, so put a spare bottle in the boot with a can of de-icer and a plastic scraper.  Keep a second can of de-icer at home and you’ll be able to deal with frozen locks quickly first thing in the morning.  Windscreen wipers should also be checked now because worn ones won’t be effective against sleet and snow and you can’t drive blind.  If it gets misty outside, keep dipped headlights on, if it gets foggy, then turn your fog lights on; you’ll be more visible and you’ll see more too.

3.  Put the right equipment in the boot.  Take an old sleeping bag (which makes a great duvet), a hoodie and a pair of gloves; shove them in a dustbin liner, put the lot in the boot and forget about it. You may never need to use them over the winter period, but you’ve got the kit just in case.  You probably already have a torch in the glove compartment, right?  If you haven’t, put one in now.  Should the weather forecast indicate that snow is a possibility, it makes sense to keep a shovel and a couple of pieces of cardboard or old carpet in the boot too; it could help you or another motorist out of a tricky situation.

If you do set off on a journey, run out of petrol, a snow storm starts and you’ve forgotten to put warm clothing in the boot, at least you’ll be able to call for help, because you’ve kept your mobile phone fully charged.  Yes?

If you’d like more advice on making sure your vehicle is ready for winter conditions, please call us on 01206 211483 or call in: Unit 4 Prince of Wales Industrial Estate, London Road, Marks Tey, Colchester, Essex CO6 1ED.

Merry Christmas and drive safely!

Pit Stop Workshop

13 August, 2012

Four times a year for the last three years, Paul Miller, manager at the Marks Tey based John Austin garage, has been successfully running free Pit Stop Workshops on Saturday mornings to help people learn about car maintenance using a practical, hands on approach.  The third one of this year was held on Saturday 11 August.

“Cars are so complex these days, there is very little we can to do if something goes wrong, so it’s easy to become a bit complacent with more general maintenance.  This inevitably leads to problems which could have been avoided, not to mention higher repair bills,” said Paul.

The Pit Stop Workshop is designed to reduce the fear of basic car maintenance through familiarity.  It gives people the confidence to know that if they are stranded with a flat tyre and the phone’s dead or there’s no signal, they can handle the situation.  As this is not covered as part of the driving test, it’s a good opportunity for those learning to drive to come along and give themselves a head start.

After Paul had put everyone through their paces, it was time for a rest and free coffee and cake at The Food Company!

The John Austin final Pit Stop Workshop  of the year will be held on Saturday 17 November.

Pass it on!

13 July, 2012

We know from our customer surveys that over 95% of our customers have come to us through referral.  We really appreciate that, and we’d like to encourage and reward those referrals starting right now.  We are therefore delighted to announce the launch of Pass it on.  As the name suggests, this scheme will reward John Austin customers with a discount of 20% off their next service or repair and the person referred to us will receive a 10% discount.  Technically, the referred person will now be a John Austin customer, so once they refer a new customer to us, they too will be eligible for a 20% discount.

To get started, all our customers have to do is call in to the garage and pick up a Pass it on card.  They complete their details and hand the whole card to a friend, colleague or relative who isn’t currently a John Austin customer; they add their details, book their vehicle in and then hand the card to us when collecting it to receive their discount.  Our customers have up to 36 months to redeem their 20% discount and, as it CAN be used in conjunction with any other promotional scheme we may be operating, that discount could be even bigger.  There is no downside to this scheme; it really is a win-win situation!

In March this year we launched our loyalty scheme Rewarding Service, where customers receive a stamp for every £20 spent at the garage (on a service, repair, MOT and products).  Once 20 stamps are collected, they, or someone they give the car to, can have their vehicle’s air conditioning serviced for FREE.  So far we’ve had an amazing response; it’s just really sad that most of us haven’t needed to keep cool.  Here’s hoping the summer comes soon.