BRITISH MOTOR-CARS.

New Zealand Herald, Volume LXV, Issue 19932, 28 April 1928, Page 13

BRITISH MOTOR-CARS.

AMERICAN COMPETITION. THE DOMINIONS' MARKETS. HANDICAP OF POWER TAX. SIR R. S. HORNE'S CONCLUSIONS. The Times published this week the following letter from Sir Robert Home, wiao hna supplied a copy to the New Ze.alanD Herald for publication. A recent journey to the Antipodes and my own personal observations are my justification for drawing renewed attention to the position of British motor vehicles in that market. Importance attaches to this subject not merely because of the value of this trade—which is already great and must become infinitely greater—but also for another reason which produces upon a visitor from the Old Country an overwhelmingly depressing effect.

So far as British manufacturers are concerned in the markets of Australia and iNew Zealand, the motor-car is assuming the character of a test of our efficiency and capacity. Nor is this surprising. In these thinly populated regions, where communities are remote from each other, and railways are, in many cases, a luxury, motor vehicles have become a necessity. In Great Britain we have one motor-car—including in this expression buses and traction vehicles-—for 46 people. In Australia, the comparative figure is 1 for 16, and in New Zealand, 1 for 10. In a large and isolated mining community which I visited in Australia the pfoportion was 1 for 6 persons—alas, almost entirely American cars. Not unnaturally in these countries people are thinking in terms of cars, and in the great cities it is the same. It is the ambition of everyone to have a car. The workman saves for it, and the clerk in the office also; and everyone watches the cars in the street and wonders which model he will buy.

Over 80 per Cent, of American Cars. I ask you to imagine what is the effect on the psychology of a people when they find that in this, the latest triumph of the mechanic's craft, in which they had always believed Great Britain to excel, the stream of cars perpetually flowing past their eyes is over 80 per cent. American —advertising day in and day out in the most insinuating fashion American skill, American efficiency, American enterprise. In our general trade, next to India, Australia is our best customer in the world. Ido not mean per capita, but in the bulk. In the last two years there has been a perceptible decline in our proportion of the Australian trade to the gain of the United States. We cannot afford to neglect these symptoms. People in Australia and New Zealand are deeply disturbed by the situation in the motor trade. I can summarise the effect of many protestations made to me from every rank of life in these woids. " We deplore the small number of British cars in our country. Wa would much rather buy British cars than any others if you would make them suit our conditions. We give you a large preference over every foreigner ;n our customs duties. Wa give you a sentimental preference also, for so long; as the difference in price is not too much, most of us buy British goods. Yet your manufacturers will not design cars as the Americans do, to meet our needs. Too often you people in the Old Country seem to us to say: ' This is the kind of thing we make, and if you don't like it, you can go elsewhere.' " The figures of last year are sufficient to show what we are now losing in this market, and give some faint conception of what it may mean to us in the future when these young countries have greatly increased their present sca.nty numbers.

Tariff Preferences. In 1927 Australia purchased 104,725 motor-cars, of which only 18,503 were British. The value of American sales was seven million pounds, and of British sales two and a-half million pounds. The most disquieting feature is that whereas in the first quarter of the year we sold 22 per cent, of the number as against 60 per cent, by the United States, in the last quarter the American percentage had risen to 87, while ours fell to nine. Yet the unassembled parts of a British chassis enter the Australian market free of duty, while the American pays per cent, for the privilege; and an assembled British chassis pays only 5 per cent, as against 25 per cent, levied on the engine which comes from the United States.

The New Zealand tariff provides for a duty on the British car of 10 per cent., while it» imposes a duty of 35 per cent on foreign cars. In that country the story of the British motor industry is not quite so depressing, but it is bad enough. Out of 13,129 cars purchased last year, 27£ per cent, only were British, though this figure shows an increase of 6£ per cent, over 1926. Canada sold more cars than Great Britain in New Zealand, and while we can rejoice at the success of another of our Dominions, wo must not forget, in this connection, that si considerable portion of Canadian motor enterprise is owned in the United States. Overseas Road Conditions.

What are the causes of our failure in this vitally important branch of our export trade ? Nobody questions our capacity to design and manufacture as good a car for use in Britain as any manufacturer in any part of the world. But conditions in the Dominions make an entirely different set of demands. They necessitate a car of wider gauge and higher clearance to suit the " tracks" of their back-country roads. Rightly or wrongly also the people prefer fewer gears. They like going along as much as possible " on top," and they infinitely dislike frequent changes oi: gear. With a oar which suits them in these respects, fhe American manufacturer supplies them; and I am informed by one of o;ir most enterprising British makers that it would be quite practicable for the British trade also to comply with these conditions. But there is one factor in the problem which is a definite handicap to the British producer, and as it is the result of legislation, it can only be altered by Parliamentary action. It was the universal and most strident complaint made to me throughout all my travels, that the British cars in the cheaper ranges have not sufficient power. Not only in Australia and New Zealand, but in Burma and Ceylcn this criticism was pointed and persistent. But who can wonder at this lack of power ? We tax our cars on their power—the more power the greater tax; and British builders have naturally made it one of their objects to design and construct their cheaper cars so as to attract as little taxation ass possible. In the result they make an engine admirably suited to ran on the majority of British roads, but very ill-equipped to confront the more arduous task of dealing with the rough and steep conditions which prevail overseas even in the immediate vicinity of large centres of population. I ventured to point this out in the Budget 'debates of last year, and my opinion has been confirmed by every inquiry which I have made since then. My mind was first directed to the question by a casual remark made to me by a representative of one of the largest American motor-car organisations. He said: "You will never get into your Colonial markets until you take your tax off the power of the car." My conversations irt the Dominions have only too forcibly endorsed his observation.

Factor of Homn Markets. A moment's reflection shows the cogency of this view. The British manufacturer cannot afford to make different types of car—one for home use and another for Dominion use. If he does, L.e loses ail the benefit of ma3s production, and his costs of construction are increased. The American is selling the same engines in tho United States as in the Dominions, and turns them out in vast numbers. Even though the difficulty which I have been pointing out be removed—which I hope may be soon—it will still require all the preference which the Dominion markets afford us to enable us to maintain a successful competition against the advantage which the American enjoys in the formidable size of his home-market. If, however, the British manufacturer is, contrary to all reason, fit ill lfeft with this handicap upon his efforts, I see but little hope for him. This letter is already of so great length that I hesitate to discuss alternative methods of taxation. I shall content myself with saying that a tax on the petrol consumption of motor vehicles would be at once a better and fairer method of raising the necessary revenue. We previously followed this practice, but unfortunately made a change with consequences then unforeseen. It is also the method pursued in New Zealand at the present time. There it is working successfully and easily, and without any complaint from those who use petrol for other purposes, who are refunded the amount of the duty on their purchases. But whatever alternative may be adopted—if we are to have any chance of retrieving for ourselves a position in markets which are of all others the most favourable to us, and in connection with an industry which holds out more promise to our great engineering communities than any in the world to-dav—it is imperative that we should change the present incidence of the motor tax in order that oar manufacturers may be left free to construct both for home and foreign use, a car of moderate price with sufficient power to attract the large and increasing number of motor-purchasers in the external markets of the world.