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BL seals pact for Japanese to produce first car in Britain

28 December 1979

BL seals pact for Japanese to produce first car in Britain
From our Correspondent Tokyo, Dec 27

BL and Honda today ratified an agreement under which a Japanese car will be produced in the United Kingdom for the first time. Terms of the agreement, signed by Sir Michael Edwardes and Mr Kiyoshi Kawashima, president of Honda, stipulates that BL will produce and sell the car under a Japanese licence. Waving a small Japanese flag at the ceremony in Tokyo Sir Michael described the agreement as critical to future employment at the British Leyland plants at Oxford. In addition it would help to ease' strains in trade between Britain and Japan.

He said: "A fully built-up motor car exported to a country with unemployment means that that county is then importing unemployment. If you do a technological deal where your car is built in another country, then that country obtains a fair amount of employment in addition to the employment you have put in your own country. So that is a fairer solution to the problem."

And "This will give us a new car to compete in the Common Market.... The deal is critical for future employment at our Oxford plant."

Sir Michael went on to emphasize that BL would continue to design and manufacture its own range of vehicles. BL had approached Honda for assistance "because it is a slim, streamlined company with many strengths where British Leyland has weaknesses ",
he added.

Under the agreement BL has been given the exclusive rights to produce and market the car in the nine EEC countries. Honda will produce the same model in Japan and market it under a different trade name in areas outside the EEC. BL will purchase plant from Honda and the Japanese manufacturer will provide components such as engines and transmission during the initial stage of production. Sir Michael said BL hoped to produce 85,000 cars a year under the licence.

A target for production had been set for the summer of 1981. He refused, however, to reveal the amount of royalties BL would pay Honda, but it is understood that it amounts to £100 a car.

Specifications of the model were not disclosed, but unconfirmed reports suggest that it has a 1,800cc engine. Sir Michael denied reports that BL was planning to enter into a similar agreement with a Japanese company to produce trucks in the United Kingdom. However, Honda and BL are to establish a joint project team to examine the other potential areas of collaboration, including the production of engines, gear boxes and other components.

Today's agreement was sealed almost 25 years after the Nissan Motor Corporation was granted a British licence in the 1950s to produce the now obsolete Austin A40 in Japan.

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