The automotive oracle: Phil Llewellin looks into the future of the British car industry with the help of its No 1 guru

SUMMER is a busy time of year for Garel Rhys, who performs the same role for the British motor industry as the oracle at Delphi did for the ancient Greeks. In the run-up to the motor trade's most hectic month - August accounts for almost one-third of the year's new car sales - the opinions of one of the country's leading motor industry analysts are in particularly heavy demand.

'I think this August will be up on last year, probably by about 10 per cent, but achieving the increase may cost the industry quite a lot in terms of profitability,' he says. 'If you are going to kickstart the market, this is the month to do it, so the industry will do as much as possible to make that happen.

'If the momentum generated by the new registration can be maintained, total sales for 1992 could be about 1.64 million.'

Although up on last year, that is still 730,000 fewer than the record-breaking 2.37 million vehicles sold in 1989.

Professor Rhys, 52, is head of Cardiff Business School's economics department and director of the Centre for Automotive Industry Research.

His interest in motor vehicles goes back to his childhood: his father ran a small haulage business in Swansea. In his youth, Britain's big names included Austin, Morris, Riley, Wolseley, Humber, Hillman, Singer, Sunbeam, Alvis, Armstrong-Siddeley, Standard and Triumph.

Professor Rhys's expertise makes him an ideal person to explain the decline of Britain's motor industry, which in the immediate post-war world ranked second only to that of the United States.

'It is a tragedy,' he says. 'There was, in a sense, an unholy trinity of reasons. Poor government policies were one cause: stop-go tactics with the economy caused manufacturers to invest in new products and new plants, only to have the market taken away by the next 'stop' phase. Industrial relations were absolutely dreadful. Attempts to pacify the militants by paying higher wages didn't work, but did push costs up.

'Poor management must also take its share of the blame for mistaken strategies and policies. The British Motor Corporation, for instance, was one of the biggest vehicle manufacturers in the world. But cars that were splendid from an engineering viewpoint, such as the Mini and Austin-Morris 1100, cost too much to make. Ford was the company that stripped vehicles down, costed components to the last farthing and eventually reaped the benefits.'

He names Ford, which has been building cars in Britain since 1913, as the company he admires most. 'Ford best appreciates the fact that it's the customer that counts. It has lost a bit of that magic in the market-place at the moment, in much the same way that a gifted cricketer can lose his touch; but it has to be respected for claiming the high ground and, by holding it for year after year, making life very difficult for its rivals.

'Small companies making niche products is what the British do well. We've not been good at making our car manufacturers into corporations that were strong enough even to survive much longer than their founding fathers. Elsewhere, strong corporate structures were created at a very early stage.

'We no longer have a British motor industry in the old sense. But there is a motor industry in Britain, where the new names include Nissan, Honda and Toyota. The Japanese presence may be a good thing, because it underlines the fact that this is now a global industry in which national identities, and the problems associated with them, are fading away. By the year 2000 it could well be Britain slugging it out with Germany for primacy in Europe. Hope springs eternal in the human breast.'

What will become of Rover in 1993, when British Aerospace is at liberty to sell its stake in the company, 20 per cent of which is already owned by Honda? Since it already regards Rover as being 'within its family', Honda must be the favourite to take control, Professor Rhys says. Other potential candidates include Volkswagen - 'the company that's starting to pull ahead of the pack in Europe' - and a form of management buy-out encouraged by Honda.

BMW is usually named as the suitor, predator or knight in shining armour - take your pick - most likely to enter into 'some sort of relationship' with Rolls-Royce, a company which, Professor Rhys asserts, is in urgent need of help at many levels, from research and development to production and marketing.

'If that does happen, I wonder if the sense of outrage will be as great as it would have been in the past. I've a feeling that most people would settle for a future with a foreign company rather than no future at all. What might stop it happening is BMW's recent decision to take a huge gamble and build a plant in the US. They are well aware that VW's American venture turned to tears, so they may need to concentrate every penny and every minute of management time on getting it right.'

When he takes off his economist's hat, Garel Rhys - whom a mutual friend affectionately nicknamed 'Garrulous Rhys' - is far from a dry-as-dust academic. My 'interview' turned into a four- hour conversation, ranging over such matters as medieval history, cricket, the 19th-century vicar Francis Kilvert's diaries and, inevitably, Welsh rugby.

He bubbles with nostalgia for motor racing's golden post-war era, when his heroes included Stirling Moss, Peter Collins, Tony Brooks and Alberto Ascari. His favourite grand prix cars from that period include the Maserati 25OF and the Aston Martin DBR 4. Among modern cars a favourite is Bentley's new Turbo R Continental: given complete freedom of choice, and sufficient funds to meet all running costs, that is the one he would ask his fairy godmother for. 'Vowing to keep it for the rest of my life would help salve the conscience,' he says. For the moment he has to make do with a Volvo 940 S.

'People who denigrate the car should remind themselves that it's the finest means of personal mobility that the human being has developed. There was a royal commission on traffic problems way back in the 1880s. It warned Queen Victoria and her subjects that cities were in danger of disappearing beneath unmentionable stuff emanating from the back ends of horses.

'The internal combustion engine was invented just in time to save us from a fate worse than death.'

(Photograph omitted)

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