DIFFLOCK.com - Buyer's Guide

IN 1978 LAND ROVER LTD was formed as a separate company inside the British Ley-land group. Its first managing director was Mike Hodgkinson. With a financial back-ground he has guided the fortunes of the company ever since. And every year it has been profitable.

I went to Solihull to talk to Mike Hodgkinson to find out what it was that kept Land Rover profitable.

The company, he told me, was set up in 1978 because it was felt that the Land Rover business was a specialist activity selling to customers who were not the sai~e people as those dealt with by the rest of British Leyland. This was felt to be specially true in the export market.

Secondly the Land Rover product had, in all aspects including investment, al-ways played second fiddle to the car business and it was time to get away from that situation. In the early days all resources, said Mr Hodgkinson, had gone into Rover cars and in the Stokes and Ryder eras Land Rover had been com-pletely forgotten.

The neglect of the product coincided with the growth in competitive activity and it became necessary to make big strides ahead even to stay in business.

"I am now of the opinion," he declared, "that if we had not become a separate business we would by now be in a desperate position.

"Since 1978 the company has been trying to do three main things," he said.

First it has been investing in more capacity. It was the inability to supply Land Rovers which let competition in.

Secondly it has invested in more productive methods of manufacture.

And thirdly Land Rover has been investigating new products and new markets.

"We are now in the process of spending £200 million," he said. "Projects that have already seen the light of day include the V-8 version of the Land Rover; a 4-door version of the Range Rover and now comes the high capacity pick-up version and improved trim in all models. There will be a further string of new products during the next two or three years," he added.

Aggressive improvement

Over the four-year period from 1978, by improving productivity and by being more aggressive the company has im-proved its standards all round. As early as 1979 the company was doing very well but by 1980—81 the economic climate and exchange rates were making things very difficult.

"Exports accounted for between 80 and 85 per cent of sales and that meant we were hit by the rising pound. We had a very difficult time in the beginning of 1981. In the second half we did better and despite these setbacks we did stay in the black".

Although Land Rover as a separate company has been around for only four

years the vehicle itself has been on the market since 1946.

"One of our combined success and failures", said Mike Hodgkinson, "is that Land Rovers will last for 35 years. But on balance our reputation for durability outweighs the slowness of replacements. Throughout the world it is everyone’s experience that Land Rover outlasts everything.

"What has happened over the years is that we have become pre-eminent in what we regard as the heavy duty market. But in the lighter sector of the market there are those customers who are not prepared to pay the extra cost of a Land Rover. We have polarised our market " he said

By introducing the V-8 Land Rover, he believed the company had entered the ultra-heavy duty market, where there had previously been complaints of lack of power. Now the more powerful vehicle performed the previously difficult tasks using no more fuel, in fact often using less fuel, than previously. The model has been extremely successful in the Middle East, Australia and Nigerian markets.

The high capacity pick-up (which is described on page 5) has more floor space than the previous model which suffered criticism of the body space being cluttered by the wheel arches.

Mike Hodgkinson also believes that a fair amount of attention has been paid to driver comfort with new seats, and a reclining seat option.

"A lot of effort has gone into refining the machine and attention has been paid to improving the acoustics in the cab. We are also pushing hard on gadgetry."

In the past few years four-by-four competition in the UK market has been

growing. Mike Hodgkinson is looking at ways to increase his market share, which perhaps surprisingly is still very credit-able.

In the entire UK 4 x 4 market Land Rover reckons to have 40—45 per cent market share but in the crucial heavy duty market which includes construction, mine and quarry, local authorities, statutory undertakings and farmers the company boasts 70 per cent of the market.

Mike Hodgkinson is taking steps to ensure that there is a correctly balanced distribution. Land Rover franchises developed as part of British Leyland history and now he is appointing addition-al Land Rover dealers.

And to make sure that users get the best deal in all ways the problems of obtaining spares have been virtually eliminated. Fleet owners can now get spares straight from the factory floor if they need to.

Since 1978 Mike Hodgkinson has seen a company grow from a loose collection of varying functions which was not even a legal entity. Progressively it has developed into a separate and legal trading company, a self-sufficient operation in-side BL.

Now he can offer delivery of the standard model in 4 to 6 weeks and the most difficult variant can usually be obtained in eight weeks.

Mike Hodgkinson concluded our inter-view with these words:

"The only message I have for cus-tomers and potential customers" he said "is that the product is still here; it is still regarded by many as the best heavy duty 4 x 4 product available and the significant improvements we are now offering should help our customers’ profitability".