Vauxhall Motors Limited Business Information, Profile, and History

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History of Vauxhall Motors Limited

Vauxhall Motors Limited, a subsidiary of General Motors Corporation (GM), is the number two seller of automobiles in the United Kingdom, just behind market leader Ford Motor Company. During 2004, Vauxhall sold 373,540 cars at home, capturing 13.9 percent of the market. Among the firm's leading models are the Astra, which comes in coupe, hatchback, and convertible versions; the Corsa three-door hatchback; the Vectra, available as a hatchback, sedan, or wagon; the Zafira minivan; the Meriva compact minivan; the Signum premium wagon; the Monaro performance coupe; the Tigra convertible coupe; and the VX220 sports car. Vauxhall also sells a line of light commercial vehicles. Vauxhall is based in Luton, Bedfordshire, just north of London, where it operated a plant for nearly 100 years before it was closed down in March 2002. The company now operates only one plant, in Ellesmere Port, Cheshire, in northwestern England, southeast of Liverpool. There, about 200,000 cars roll off the assembly line each year. Other vehicles sold by Vauxhall are produced at other GM-affiliated plants in the United Kingdom and elsewhere.

Early History: From Marine Engines to Vauxhall Motors

Although the first Vauxhall automobile was produced in 1903, the origins of the company date well back into the previous century. In 1857 a Scottish engineer named Alexander Wilson established a manufacturing firm near the fashionable Vauxhall Gardens and the Vauxhall Bridge in London. Originally called Alexander Wilson and Co., but known locally as the Vauxhall Works, the firm initially focused on large steam-powered marine engines but soon diversified into other machinery, such as donkey engines (an American invention of the 1880s) for boiler water feeders. Wilson left the company he founded to become an engineering consultant in 1894, around the same time that the firm began experimenting with internal combustion engines. The company soon ran into financial difficulties, and in 1896 the company was reorganized as the Vauxhall Iron Works Company Limited, with a workforce of 150.

At this time, motor cars were beginning to appear on London streets, particularly with the raising of the speed limit from 4 to 12 miles per hour in November 1896. At Vauxhall Iron Works, the experiments with internal combustion engines, now under the engineering guidance of Frank William Hodges, resulted in the development in 1897 of a single-cylinder gasoline engine that successfully powered a small river launch named Jabberwock. It is believed that this engine provided the inspiration for the 5-horsepower, single-cylinder engine that was placed into a light car chassis to create the first Vauxhall production car, launched in mid-1903. This "horseless carriage" featured only two forward speeds and no reverse, was controlled by a hand throttle, was steered by a tiller arm, and came in two- and four-seat models, the four-seater putting the two extra passengers over the engine compartment in front of the driver. Approximately 40 of these were sold at prices starting at £136. Early in 1904 a new model debuted with a more powerful 6-horsepower engine and a reverse gear. In September of that year the company changed over from tiller arm steering to the more popular steering wheel. Forty-four of this model were sold before Vauxhall introduced a 12/14-horsepower model in late 1904 selling for £375.

Vauxhall's successful move into motor cars prompted a need for expanded factory space. The solution came via a 1905 merger with West Hydraulic Company, forming the Vauxhall and West Hydraulic Company Limited. This enabled the company to set up a car factory in Luton, in Bedfordshire just north of London, on land West Hydraulic had owned. Soon thereafter, the management concluded that the widely diversified manufacturing activities of Vauxhall and West Hydraulic were holding back the development of its automobile business. In 1907 the latter was spun off into a newly incorporated, entirely independent firm called Vauxhall Motors Limited. (Vauxhall and West limped along through World War I, but was eventually wound down in 1918.) Serving as chairman and joint managing director was Leslie Walton, who had a background in finance and was a major company shareholder. The other managing director was Percy Kidner, an engineer who had joined Vauxhall Iron Works in 1903.

1908-19: Pomeroy-Engineered, Competition-Based Success

The earliest Vauxhall models, when Hodges was the chief engineer, were of a fairly pedestrian design. The shift to the production of cars with more distinction came via Hodges's successor, Laurence Henry Pomeroy, who, like many early automobile engineers, had apprenticed as a locomotive engineer. In a twist of fate, Pomeroy was given the chance to design a more powerful engine when Vauxhall's directors decided to build a special car to compete in the newly formed Royal Automobile Club's 2,000-mile Trial of 1908. At the time of the decision, Hodges was on vacation in Egypt, so the task fell to the 25-year-old Pomeroy. He designed a more powerful and technically advanced 20-horsepower engine, which powered a model eventually called the A-type. This car went on to win the trial for its class, beating out the Rolls-Royce "Silver Ghost." The A-type also later set several speed and distance records, all of which fueled public interest. Nearly 200 of this model left the factory in 1909, and production reached 246 the next year. The next model, the B-type, set four world speed records and performed superbly at the 1911 Russian reliability trials. Engine power was at this time a preeminent factor in selling cars, and the B-type was soon fitted with Vauxhall's first six-cylinder engine; the power of its engine increased from 27 to 35 horsepower between 1910 and 1913.

Pomeroy solidified the reputation of Vauxhall through the design of two more well-received models, the C-type, also known as the Prince Henry, and the 30/98. A doorless four-seater selling for about £580, the Prince Henry is generally considered to be the first true sports car. Between 1911 and 1914, 190 Prince Henrys were produced in Luton, and the car achieved a great deal of success in various races and contests in which it competed. The 30/98 was first produced in 1913 to compete in the Shelsley Walsh hill-climb, a competition it won handily, setting a course record that stood for 15 years. Only a few of these cars had been sold to sporting enthusiasts by 1914 (at a price of £900), but after World War I production increased; 600 were produced before the model was discontinued in 1926, and the 30/98 proved to be a strong rival to Bentley products.

Overall production reached 387 by 1913, when Vauxhall employed 575 workers. Production was slowly increasing, but Vauxhall was not yet a mass production operation, and it lacked the capital to become one. Its focus during this period was on medium luxury cars--not the cheaper and smaller models of the mass producers--and it was steadily making money doing so. In 1913, for instance, pretax profits of £30,868 were posted on sales of £220,690. Nevertheless, the Pomeroy-designed models were in great demand, and the Vauxhall board recapitalized the company in the spring of 1914 in order to provide funds to boost production. The outbreak of World War I in August, however, thwarted these plans.

Vauxhall's entire production went toward the war effort for the duration of the conflict. The U.K. War Office chose a less glamorous Vauxhall model, the 25-horsepower D-type, as an army staff car, and the company supplied 2,000 of them during the war. Vauxhall also was awarded large contracts for the manufacture of fuses, and it built and equipped a new factory adjacent to the car plant to meet these demands.

Financial Travails and GM Takeover in the 1920s

The Pomeroy era ended abruptly in 1919 when the chief engineer resigned in order to embark for the United States to escape an unhappy marriage. His immediate successors, while fine engineers, lacked the knack for innovation that was characteristic of Pomeroy. A larger problem for Vauxhall Motors, however, came in the form of management blunders in the post-World War I era. Anticipating a postwar boom based on pent-up demand for automobiles, Vauxhall and other British carmakers stepped up production. Output at Vauxhall reached 689 by 1920, but the company was still using handcraft methods rather than mass production, which limited capacity, and its focus remained on higher-priced medium luxury vehicles, which limited its potential market. When the postwar boom collapsed in 1920 and 1921, demand for cars fell 50 percent, and Vauxhall and other higher-end producers suffered disproportionately. Vauxhall was forced to slash both prices and production, leading to a huge loss of more than £221,000 for 1921, as revenues fell from £812,600 to £519,200. The firm suffered another loss of £76,710 the following year.

Vauxhall's board responded to this predicament by turning to the production of a smaller, less expensive vehicle, while still making the larger ones as well. The 14-horsepower M-type, introduced in 1922, sold for £650. This was considerably more than the under-£300 models being mass-produced elsewhere but well below Vauxhall's £1,000-plus D-type sold from 1919 to 1922. The M-type was followed by the slightly modified LM-type, also 14-horsepower, which debuted in 1924 and sold for as little as £495. As Vauxhall was attempting this shift in focus, there occurred a not-coincidental shift in the wider market as commercial success for automakers would no longer come from achievements in races and competitors but from producing cheaper cars aimed at middle-class families. Vauxhall, therefore, withdrew from competitive racing in 1923.

Although production at the company grew to 1,366 vehicles by 1924, Vauxhall still lacked the capital to increase output to a level high enough to compete with its rivals. With the firm saddled by debt, its future in doubt, the board agreed in late 1925 to sell Vauxhall to General Motors Corporation (GM) for $2,575,291. Vauxhall gained much needed capital to shore up its finances and fund production increases, while GM secured its first production base in Europe--though a tiny one by GM standards, with Vauxhall then producing about 1,500 vehicles per year versus the American giant's 836,000.

Not much actually changed in the immediate aftermath of the GM takeover, although production did reach as high as 2,589 in 1928. Vauxhall, however, began suffering heavy losses again in 1927, leading GM to push for changes at its British subsidiary. By 1928 most of the holdovers on the management team from the pre-GM days had left, and the following year Charles Bartlett was named managing director. Trained in business practices and accounting, Bartlett was a GM man, having worked since 1920 for the GM subsidiary in England that imported GM cars from the United States. But he also was an Englishman through and through, which fit with GM's plan to keep Vauxhall 100 percent British--in management, staff, and product. Bartlett would lead Vauxhall into the ranks of the "Big Six" British automakers by the late 1930s.

Into the Big Six in the 1930s

The move of Vauxhall Motors into the top ranks of the U.K. auto market stemmed from GM's firm backing and guidance. Perhaps most important was the reorganization of production along mass assembly lines, but the Bartlett-led firm also benefited from GM's tutelage in intensive marketing practices and the transference of some American engineering and design principles to the British company. The first visible result of the "new" Vauxhall was the Cadet, introduced in 1930. Although this was not a small car, offered in 17- and 26-horsepower, six-cylinder versions, the Cadet propelled Vauxhall into the lower end of the market as the smaller version sold for less than £300. Sales of the Cadet, however, proved disappointing, in large part because the U.K. market had shifted solidly toward smaller cars--those of 14 horsepower and below. The Cadet was nevertheless noteworthy for two other reasons. It was the first British car to feature the synchromesh gearbox, which made shifting easier and smoother, and its design was actually based in large part on that of the Opel Kadett. This marked the first connection between Vauxhall Motors and the German firm Adam Opel AG, which GM had acquired in 1929.

Production at Luton neared 4,000 in 1931, but it was the introductions of the Light Six in 1933 and the Big Six two years later that propelled Vauxhall into mass production. These proved to be big sellers thanks in no small part to their low prices. The Light Six was available in 12- and 14-horsepower versions for £195 and £215, respectively, while similar versions of the Big Six went for £205 and £225, respectively. Production topped 26,000 vehicles by 1935, by which time revenues had surpassed the £7 million mark. A good portion of this turnover now came from the sale of light trucks. In April 1931 Vauxhall introduced the rugged and reliable Bedford truck, initially offered in a two-ton version and later in a more popular 3,000-pound model. The Bedford was an immediate success, quickly capturing one-quarter of the British output of commercial vehicles as production grew from more than 11,000 in 1931 to more than 31,000 in 1937.

Rounding out the 1930s was the introduction of the Vauxhall Ten in 1938. With this model, Vauxhall became the first British manufacturer to produce a car with an integrated body and chassis. The company sold 55,000 of these £168 cars by 1940. The success of the Ten propelled Vauxhall car production to more than 35,000 vehicles in 1938. That year the company captured 10.4 percent of the U.K. car market, a remarkable advance from 1929, when its share amounted to less than 1 percent. It trailed only Morris, Austin, and Ford in market share, while ranking just ahead of the other two members of the Big Six, Rootes, and Standard.

Production of cars virtually ceased with the outbreak of World War II in 1939, but Vauxhall continued churning out Bedford trucks, producing a quarter of a million of them for the British army by war's end. The company also was commissioned to design and build a new tank. Within one year, the first of 5,640 Churchill tanks exited the production line at Luton. Vauxhall produced a variety of other war materials as well, including more than five million fuel cans, four million rocket engine components, and three-quarters of a million helmets. The Luton plant became a target for German bombers, and in August 1940 several dozen bombs were dropped on the plant, killing 39 employees and injuring 40 more. Remarkably, production resumed less than a week later.

Postwar Period of Prosperity

Immediately following the war, Vauxhall resumed production of its prewar models. The company soon ended 10-horsepower engine production, however, when the British government shifted from horsepower-related car taxation to a flat-rate system in mid-1947. After the Vauxhall Twelve and Fourteen, the next big shift in car styling came with the 1951 introduction of the E-type, available in several versions, including the Wyvern, the Velox, and the luxury Cresta. Among the typical accessories of this period, the Wyvern featured a sun visor above the windshield and antiglare "eyebrows" on the headlamps. Some 342,000 of the E-type vehicles were produced before their run ended in 1957. By this time, it should also be noted, Vauxhall was exporting its models to more than 130 countries. Around this time, Vauxhall, under pressure from its parent GM, adopted the practice of updating its models every year, as American carmakers did.

Meanwhile, in 1953, 50 years after production of the first Vauxhall car, annual production reached 100,000 and the millionth car rolled off the assembly line. The company posted after-tax profits of £3.4 million on sales of £58.6 million. That same year Bartlett stepped aside as managing director to briefly become chairman, ending 24 years at the helm. Increased demand for cars led the company in 1954 to begin a series of investments in production facilities totaling £36 million. In July 1955 production of Bedford trucks was shifted from Luton to a new plant in nearby Dunstable, thus enabling the Luton plant to put all of its energies into car production. On the new model side, the F-type Victor, debuted in 1957, and the 1958 Victor Estate model became the first Vauxhall-produced station wagon.

In the early 1960s Vauxhall managers decided to add a smaller car to its lineup to sell alongside the larger Victor and to build it in a new factory. The Merseyside town of Ellesmere Port was selected as the site for the new plant in part based on incentives offered by the British government to companies locating in economically depressed areas. In designing the car, for the first time a "shared platform" was developed by sister GM companies Vauxhall and Opel. The first HA Viva rolled off the new production line in 1963 (the same year Opel began making its version of the same car, the Kadett A). The Viva became immensely popular. By the time production ended in early 1966, more than 307,000 had been built. Its successor, the HB Viva, sold from 1966 to 1970, did even better as production totaled more than 556,000. Revenues at Vauxhall reached a record £216.4 million in 1968, when after-tax profits totaled £5.3 million.

Struggles in the 1970s and 1980s

Despite the success of the Viva, which continued throughout the 1970s when more than 640,000 HC Vivas were sold, Vauxhall fell into a prolonged slump. From 1969 through 1986, the company made money during only one year, 1978. Its share of the British car market fell to as low as 7.3 percent (1973) before recovering in the early 1980s, hitting 16.2 percent in 1984. The reasons for this poor performance were multifold. Vauxhall's larger models, the Victor and Ventora, did not sell well in part because of quality problems stemming from the Luton plant. Operations there were affected by production cutbacks and two major strikes in 1977 and 1979. More generally, the U.K. car market was hit hard by the oil crisis, economic recession, and increased competition, particularly from Japanese and European imports. Ironically, during this same period Vauxhall's Bedford truck and van operation was highly profitable, but GM elected to separate it from Vauxhall in 1983, creating the Bedford Commercial Vehicle Division.

In the meantime, a key shift occurred in 1978 when GM officials further pulled the reins back on Vauxhall's autonomy by assigning Opel engineers in Rüsselsheim, Germany, the task of designing new cars for both Opel and Vauxhall. This brought an end to British-designed Vauxhalls, with the FE Victor, produced from 1972 to 1976, representing the last of that breed. This decision, though painful to British pride, helped to bring about Vauxhall's recovery by the mid-1980s. The Chevette, sporting the hatchback that became common on later Vauxhall models, was successfully introduced in 1978 as the replacement for the Viva. Vauxhall also began selling the Cavalier, an Opel-designed model filling the gap between the Chevette and Victor ranges. Starting in the early 1980s, the Cavalier became immensely popular with buyers of "fleet" or company cars, a sector that comprised as much as half of the U.K. market. Sales of the Cavalier passed the one million mark by July 1988, and Vauxhall continued producing the model in Luton through 1995. During this period, the Cavalier represented as much as one-third of Vauxhall's overall production. Also Opel-designed was the Astra, introduced in 1980 as Vauxhall's first front-wheel-drive car. The Cavalier and the Astra were consistently among the top ten--and sometimes the top five--best-selling cars in Britain. Rounding out the 1980s model lineup were the high-end Carlton, introduced in 1979, and the Nova subcompact, which debuted in 1983 as a two-door sedan.

1990s and Beyond

Vauxhall remained profitable throughout the 1990s, though the amount of profits fluctuated substantially. Its share of the U.K. car market reached as high as 17.2 percent (1993). In July 1993 Vauxhall gained the leading share of the U.K. market for the first time in its 90-year history, garnering 23.2 percent of sales versus 20.3 percent for Ford, the longstanding market leader--just a one-month achievement, but an achievement nonetheless. A number of new vehicles saw their way into the Vauxhall lineup, including the Frontera four-wheel-drive recreational vehicle (1991); the Corsa hatchback (1993), which replaced the Nova; the Tigra sports coupe (1993); the Omega (1994), successor on the luxury end to the Carlton; the Vectra sedan and wagon (1995), which replaced the Cavalier; and the Sintra minivan (1996), which was quickly replaced by the better-received Zafira (1999), a seven-person, flexible-seat minivan based on the Astra platform. In addition the Astra was completely redesigned in 1998. The Vectra did not sell as well as the Cavalier and was panned in the press, but the Astra remained a bestseller in its class.

GM backed up Vauxhall with several large capital investments during the decade. In late 1992 production began at a new £193 million engine facility at the Ellesmere Port plant. The V6 engines produced there were slated for use in higher-end models of not only Vauxhalls but Opels and Saabs as well (GM having purchased a 50 percent interest in Saab Automobile AB in 1989). In 1996 Vauxhall announced a £300 million modernization program at Ellesmere Port to raise capacity from 135,000 cars and vans per year to 200,000 and to prepare for the 1998 introduction of the next-generation Astra.

Then came the stunning news from GM in December 2000 that production would cease at the Luton plant, leading to the elimination of 2,000 jobs. This was part of a larger GM restructuring aiming in part to address the overcapacity that was plaguing carmakers worldwide. The Luton plant in particular was selected for closure in part because it was an older and less efficient facility. It did not help that it was the struggling Vectra model that was being produced there. Part of the Vectra production was slated to be shifted to GM plants in Spain and Germany, but in 2001 the Ellesmere Port factory received a £200 million capital injection in order to transform it into a so-called flex plant, capable of producing both a new version of the Vectra, which debuted in mid-2002, and the Astra at the same time. On March 21, 2002, the 7,415,045th--and last--car rolled off the assembly line at Luton, bringing to a close 97 years of auto production in that facility. Vauxhall Motors remained headquartered in Luton.

Along with the entire GM European operation, Vauxhall posted losses throughout the early 2000s. Its models were criticized for being unimaginative, and it was hurt by an image of being a maker of fleet cars. The car market was stagnant during this period, and the competition fierce. GM turned to centralization as a way of turning things around in Europe. Late in 2003 the company announced that it would integrate the sales, marketing, and after-sales operations of its European brands, including Vauxhall, Opel, and Saab. Then in June 2005 a major overhaul of GM's European operations was launched that further reduced the autonomy of Vauxhall, Opel, and Saab, shifting responsibility for engineering and manufacturing to the regional headquarters in Zurich. This was part of a larger effort to centralize global product development, cutting overlapping engineering projects and reducing costs worldwide. Whether this would reduce the Vauxhall company itself to merely a marketing and sales organization was not initially clear. One certainty was that the Vauxhall lineup would be thoroughly overhauled, because GM planned to replace 90 percent of its models by 2008. Vauxhall had found great success with the new fifth-generation version of the Astra, which debuted in May 2004. Stellar sales of the Astra pushed Vauxhall ahead of Ford in U.K. market share for two of the first four months of 2005, prompting hopes in Luton that Vauxhall might beat out its arch-rival for the full year and finally end Ford's quarter-century-long dominance of the British car market. Meanwhile, an all-new version of the Zafira minivan hit the market in July 2005. GM also was considering assembling some Vauxhall (and Opel) vehicles in North America and then shipping them to Europe.

Principal Competitors: Ford Motor Company; Volkswagen AG; DaimlerChrysler AG; Toyota Motor Corporation.

Chronology

• Key Dates:
• 1857: Alexander Wilson establishes a company near London's Vauxhall Gardens to build marine engines.
• 1897: The company is reorganized as the Vauxhall Iron Works Company Limited.
• 1903: The first Vauxhall production car, with a 5-horsepower engine, is launched.
• 1905: Car production is shifted to a new factory in Luton, Bedfordshire.
• 1907: Company's automobile business is split off into the separate and independent Vauxhall Motors Limited.
• 1911: The Prince Henry, considered the first true sports car, debuts.
• 1925: General Motors Corporation purchases the financially troubled Vauxhall Motors for $2.6 million.
• 1931: The company begins producing Bedford light trucks.
• 1933: The Light Six becomes Vauxhall's first truly successful mass-produced car.
• 1964: The first HA Viva rolls off the assembly line at the new plant in Ellesmere Port.
• 1969: Vauxhall posts a loss for the year, which it will also do for 16 of the next 17 years.
• 1978: GM elects to give Opel engineers responsibility for designing both Opel and Vauxhall cars.
• 1980: The Astra, the first front-wheel-drive Vauxhall, makes its debut.
• 1983: The Bedford truck operation is separated from Vauxhall, becoming a GM division.
• 2002: The Luton plant is shut down, after producing more than 7.4 million vehicles over 97 years.
• 2005: GM centralizes the engineering and manufacturing of its European brands, including Vauxhall, in its European headquarters in Zurich.