The 1960s was a period of expansion and financial profitability for BMC in Australia. However, towards the end of the decade it became clear that a lack of suitable models from the UK and the threat from Japanese car makers would make life difficult for the company in the years ahead.
The fact that many BMC products were not really suited to Australian conditions had been recognised by earlier management and a £12 million expansion of the Zetland factory begun. The Press Shop and main Car Assembly Building (CAB1) were completed in 1957, with the first cars coming off the line in December. However, these were still from a UK design (Morris Major/Austin Lancer/Wolseley 1500) and sales were slow.
A new engineering team was coerced away from Holden and Chrysler that year, led by Bill Abbott, with the long-term goal of developing cars specifically for the needs of Australia.
In 1950 British designed cars accounted for 70% of the Australian Market, with Austin and Morris combining to hold over 30%. With clever marketing and a certain amount of patriotic fervour, within five years of its 1948 launch Holden held around 50% of the market and had established its six-cylinder cars as having the size, performance and robust simplicity required for Australia.
With locally-produced examples of six-cylinder Valiant and Falcon arriving in 1960, BMC was pushed further down the order. By 1960 BMC accounted for only 9.8% of all car registrations in the country.
1959 had seen the completion of the Product Engineering building at Zetland, which incorporated the Experimental Department, Drawing Office, Styling Department and administration. The first task for the engineering team at BMC was the “Australianisation” of existing models. Their long-term goal remained an all-Australian car.
Their first project had been in enlarging the B-series engine from 1489cc to 1622cc for use in the Farina-designed ADO9 range (Austin A60, Morris Oxford Series V, Wolseley 15/60). Although a technical success, the ADO9 cars, with four cylinder engines, struggled against the six-cylinder competition from the “Big Three” companies.
However, under development were three cars that would change BMC’s fortunes, The YDO1 Morris Major Elite and ADO40 Austin Freeway (see BMCE Issue 3), and the technically advanced front-wheel-drive Morris 850 (Mini).
In 1961, under new Sales Director Lindsay Shimmin, a major rationalisation of dealerships took place that saw their numbers virtually halved, as all cars were sold under BMC franchises. It was also decided that to avoid the unnecessary in-house competition due to badge engineering, all future models would be sold under one brand: Morris for small and compact models, Austin for medium and family size, and Wolseley for luxury cars. However, with no luxury model on the immediate horizon, the initial exception to this new rule would be Freeway, with a luxury version sold as the Wolseley 24/80.
But before any of these three models could be released the Federal Treasurer, Harold Holt, imposed a credit squeeze in October 1960; bringing strict credit restrictions for the purchase of houses and cars, increased interest rates and increased sales tax on motor vehicles.
Sales of cars slumped, with national registrations falling by 23% for the 1961 year. BMC’s sales fell by the same amount, which meant its market share remained the same. Outright figures, though, show an alarming situation.
Sales of Morris Minor, which had been assembled at Zetland since 1950, fell from 3,304 in 1960 to 1,879, while Austin A40 (Farina) fell from 1,856 to 1,007 and Morris Major (Series II) dropped from 11,134 to 5,157. ADO9 cars faired slightly better, selling 5,089 for 1961, against 7,799 the previous year.
If not for the Mini, released in March 1961 and selling 5,426 by year’s end, the situation would have been even more grim.
In the middle of the year, manufacturing Director, Bill Abbott, and Finance Director, Harold Sainsbury, were ordered to Longbridge for a “please explain” meeting, and returned under orders to turn the company around and make it financially viable.
Operating costs were cut where possible, 1,000 people retrenched, attendance bonuses cancelled (they were reinstated at the end of the year) and only basic award wages paid.
The credit squeeze was lifted in June 1961 and sales immediately recovered. In 1962 total car registrations were up 41.8%, getting back to above 1960 levels.
BMC’s figures took an even more dramatic turn. With the release of the Major Elite and the ADO40 twins, and the dramatic and unexpected success of the Mini (up from 5,426 to 14,424) company sales were up 97.6% and an increase of 52% on 1960.
Having suffered “nothing but losses” since the expansion of its factory, BMC was able to turn a healthy profit. In the 1962-63 financial year, BMC recorded a net profit of £1,353,124 – up from £120,031 in the previous period.
The 1963 calendar year saw Mini sales increase to a peak of 20,913. The following year saw the introduction of the Morris 1100, selling 17,701, while Mini remained at a healthy 16,631. But, while this meant an increase of 4% in total sales for the company, it was only half the growth of the overall market.
That year Bill Abbott became Managing Director and David Beech took on the role as Engineering Director.
The big winners in the market place were the Japanese, particularly Toyota and, later, Nissan. Having only entered the local market in any numbers in 1963, within four years they would equal BMC’s total car output.
With its release in 1965, the Austin 1800 was reasonably successful in Australia. However, its technically advanced front-wheel-drive layout and four cylinder engine meant it had little impact on the conservative family car market, which was still firmly in the grip of Holden and Ford, with Chrysler a distant third place. Looking at registration numbers alone, the 1800’s success came at the expense of sales of the 1100 and picking up sales from the Freeway, which it replaced, rather than taking sales away from Holden and Ford.
Only released in November, Austin 1800 registrations in 1965 were 1,703; Freeway/Wolseley were 2,301; Morris 1100 were 20,378 (its best year and making it the biggest-selling small car in Australia); Mini were 15,193. Total factory sales were down 4.8%, at 38,577.
For the following year: 1800 – 9,343; Freeway – 641; 1100 – 14,746; Mini – 13,248. Total factory sales were again down 4%, to 37,978.
By comparison, over 170,000 of the HD Holden were sold between February 1965 and April 1966.
However, BMC Australia made its highest net profit, of £2.235 million for the 1964-65 financial year. This dropped in 1965-’66 to $3,761,895 (£1.88 million: decimal currency having come in on 14 February 1966).
It is not surprising that the company was confident enough to progress with plans to build a new administration block on the eastern boundary, and in 1966 change the official address of the factory to Waterloo.
BMC’s cars were technically advanced and included many advancements in safety and design. The Morris Cooper (the pocket-rocket version of the Mini) was the first Australian production car with disc brakes, and the Morris 1100 the first four-door family car with discs. The Austin 1800 was the first Aussie car with seatbelts fitted as standard equiment.
BMC’s cars handled better, stopped better and were generally better finished than Holden or Ford, yet they couldn’t break into the all-important family car market.
This all came at a price, of course, as the technologically advanced cars cost more to make, and some of the processes and procedures used – such as the Rotodip and hot-run testing of every engine – were expensive.
Management at BMC knew a complete overhaul of the model range, with more emphasis on the Holden/Ford dominated family car sector, which represented around 60% of the total car market in Australia, was needed. They would also need a new model to combat the growing threat in the small car market from the Japanese.
In December 1966 BMC took the step of setting up a small team, headed by David Beech, to come up with a long-term future model policy. By June 1967 they reported that to meet perceived market demands and for the company to remain viable, a two-model policy would be needed, with a combined output of 70,000 vehicles – almost double the then current figure.
Model A would be in the small car field, while Model B would be the family size car.
They calculated that for a 1973 release, design would need to begin by October 1967. In the meantime, the 1100 and 1800 would need to go through facelifts and updates to keep them current until the new cars were ready for release.
In the 1966-67 fiscal year, BMCA’s profit had fallen to $1.7 million. The proposed new cars for 1973, and the interim models to fill the gap, would have to be done on a very limited budget.
If you would like to read the rest of this story, grab a copy of the magazine from your local newsagent, subscribe on our website (www.bmcexperience.com.au) or get the digital issue from http://pocketmags.com/viewmagazine.aspx?titleid=2423&title=BMC+Experience
The BMC Experience Issue 12. Jan-Mar 2015 Magazine
All back issues of The BMC Experience are now available in digital format from www.pocketmags.com.