British Car Industry Reduces Output

Press, Volume XCIII, Issue 27861, 9 January 1956, Page 9

British Car Industry Reduces Output

(Rec. 8 p.m.)

LONDON, January 7.

A slow-down in British car production, blamed on the Government's tight monetary policy, brought front-page headlines to most British newspapers today. Three factories—producing Austin, Humber Hawk and Standard cars—were cutting production because of falling sales and a glut in stocks, according to the “Daily Telegraph.”

Austin motor works at Birmingham announced that 18.000 workers would soon be put on a four-day week as a "temporary phase,” cutting production by 1000 cars a week.

But the "Daily Telegraph” also reported that Humber Hawk production would be cut by the Rootes Group next week, affecting only a few employees. The firm would continue full output of Hillmans and Sunbeams.

Standard Motors had already reduced production on eight and 10-horsepower cars by 200 a week without altering workers’ hours, the newspaper's motoring correspondent said. "The present situation is a mild reflection of what is happening in America.” he reported.

But British dealers did not expect to be forced into American methods of offering inducements to secure sales, he said.

"At the same time, students of the situation are considerably perturbed.

“They point to the huge expansion programme on which all the big producers are engaged and the need for

greatly expanding markets. "They also point out that the huge increases in production in France. Italy and Germany are not being accompanied by a sales recession,” said the correspondent. Other newspapers speculated that one of Britain's bread-and-butter export industries was entering a minor recession after years of holding home buyers to long sales waiting-lists.

The Austin announcement of shorttime factory working brought a share fall in car shares on London’s Stock Exchange. Shares of the British Motor Corporation (the Austin-Morris . merger), dropped 4£d to 8s 3d. Rootes fell 4£d to 5s 9d. Ford shares sold for 42s—a Is drop. Second-hand car company shares also fell.

“Britain’s booming car industry has been hit by the credit squeeze,” the

“Daily Sketch” said. “It is the clearest sign yet that the industry’s 11-year post-war boom is ending,” the newspaper said.