Jaguar wins long struggle to expand at Coventry

By Clifford Webb Midland Industrial Correspondent

The Government has given the go-ahead for the first new car Plant to be built in the Midlands since stringent controls were imposed on industrial expansion 12 years ago. It is understood British Leyland has been granted an industrial development certificate for a new factory at Coventry which could double production of its best-selling Jaguar cars.

No official confirmation was available from British Leyland last night and the Department of Trade and Industry said it was unable to comment on individual applications. But it is understood the certificate was granted several months ago and is not related to the measures just introduced.

The tremendous success of Jaguar's XJ6 saloon and the company's inability to satisfy demand in overseas markets has prevented Lord Stokes, the BLMC chairman, from pressing ahead with his declared intention of challenging Mercedes' domination of executive saloon markets. But both Lord Stokes and Sir William Lyons, who has just retired from the chairmanship of Jaguar, were determined not to give way to Government pressure to expand in a northern development area. The continuing troubles at the loss-making Bathgate truck and tractor plant were too fresh in their minds.

Since it was established by BMH in the Scottish development area of West Lothian ten years ago, Bathgate has been a constant thorn in the group's side. Clearly Lord Stokes has now persuaded the Government that expansion in Coventry close to Jaguar's existing factories in Browns Lane and Radford is vital if the British group is to keep its lines of communication short enough to be fully competitive with international rivals.

Until quite recently Sir William is reported to have refused to allow Jaguar cars to be assembled in numbers overseas because he feared he would not be able to retain the control of quality essential to maintain Jaguar's world-wide reputation. Now Jaguars are being assembled in growing numbers in New Zealand and South Africa, and there are plans for assembly in other oversea markets. Additional manufacturing capacity is urgently needed at Coventry to supply these plants with CKD (completely knocked down) kits.

By utilizing every inch of the Brown's Lane factory, production of the XJ6 has been built up to some 650 cars a week. But this is still woefully short of market requirements. The massive reorganization of British Leyland's European sales network which has taken place over the past three years has provided the means to sell the car in quantity and back it by the high standard of spares and servicing Sir William has always insisted on.

The XJ6 has also given British Leyland an entree to the United States luxury sedan market. About 100 XJ6s a week are being shipped there. This is in addition to the 80 per cent of E-type sports car production which always goes to the United States. Industry sources suggested last night that because of competing calls on the group's finances it would be some time before building started.

But the fact that it has made the final break-through in the Midlands will enable Lord Stokes to expand the role of Jaguar in his marketing plans. It may also encourage other car firms to think again in terms of expansion on their home bases.