A tight timetable and a break with development tradition gave Land Rover a winner - and the Japanese a setback. Annabella Gabb reports.
The bonnet rises skywards at an acute angle and plunges down a deep, dark rut into two feet of swirling mud-thick water. Branches flick venomously across the windscreen and scrape raucously along the sides of the vehicle. It advances regardless, oblivious to the obstacles. Disturbed by the sudden noise of a powerful engine, a kingfisher darts through an opening in the dense green undergrowth.
This is not some nightmare jungle, miles from civilisation. It is the urban heart of south Birmingham, a deceptively small patch of land that has been allowed to go wild in the interests of off-road driving. The Discovery, Land Rover's first new vehicle for 19 years, is going through its paces, negotiating slopes of 45 degrees up and down, and sideways tilts of much the same angle. Flights of steps and ranks of railway sleepers are no barrier to a vehicle built with the engineering know-how of Land Rover.
But the Discovery is not just another Land Rover, nor yet another Range Rover, the utility vehicle's upmarket sibling. Launched in November 1989 into the ludicrously named "personal transport sector" - industry-speak for a mid-range four-wheel-drive vehicle aimed at the leisure-oriented active family of the 1990s - it is designed to appeal to a more youthful market than either the Land Rover or the Range Rover; to be trendy, but not in the transitory sense of the word.
The Discovery is more than that. It represents the company's fight-back against the Japanese, who created and dominated the sector throughout the past decade. In 1990, the Discovery's first full year of sales, it left the competition standing, outselling the former market leader, the Mitsubishi Shogun, by almost two to one in the UK. Sales for the first seven months of this year look set to maintain the rising curve, with domestic sales of 4,443 against 3,266 again compensating for reduced sales of the Range Rover and Land Rover. Meanwhile, it has provided a welcome positive boost for the sagging bottom line of parent group Rover. The victory is all the sweeter when set against the background of general decline in UK vehicle manufacturing and the parallel rise of the Japanese.
After almost 20 years without a new product, the £100 million development and launch of the Discovery was crucial for Land Rover. In place of two products at opposite ends of the spectrum, it now spans the market with three distinct products on which to base its future growth: the Range Rover, the Discovery and the original (though regularly updated) workhorse, rechristened the Defender last year to allow the marque its own identity. All sell in roughly equal proportions, with three quarters of of production going for export. Group sales, at over 66,000, are at their highest ever.
With hindsight, managing director Chris Woodwark admits that Land Rover needed the new addition to its range. "We were trying to stretch the Defender up too far and have the entry-level Range Rover too low. The Discovery has given Land Rover back a lot of confidence."
Confidence was at a low ebb in the mid-1980s as market changes took their toll on once-buoyant sales and rationalisation bit into the organisation. Hard times felt especially hard for a company accustomed to producing an acknowledged world beater. The original Land Rover was the brainchild of Maurice and Spencer Wilkes, respectively chairman and chief engineer of the Rover Car Company in the immediate post-war years. Maurice Wilkes used to drive a US Army jeep round his farm but was convinced that Rover could build a better four-wheel-drive machine. At the same time, Rover was under strong pressure from the Government to produce cars in volume, especially for export. The Land Rover, launched at the Amsterdam Motor Show in 1948, seemed to fit the bill.
It was an instant success, attracting huge interest in particular from the Third World, where its strength was its ability to go anywhere, whatever the conditions. In the developed world, too, it was a symbol of British engineering excellence and became a must for farmers, foresters, civil engineers, the police and the armed forces - even today, two thirds of the 1.7 million vehicles ever produced by the company are still on the road.
The 1970s were the golden years for the Land Rover, as managing director Woodwark, then regional sales director for Africa, well remembers. By 1980 over 80% of Land Rover's utility vehicles were destined for Third World countries. But like all good things, that era came to an end. In the mid-1980s Land Rover's dependence on the Third World, once its overriding strength, became a serious weakness as it encountered conditions which almost proved too much for it. Key markets in Africa and the Middle East were undermined by the effects of escalating national debt and oil crises. "Given the historic importance of those markets to us," admits sales and marketing director John Russell, "the business was at some risk."
Sales of the workhorse peaked at just over 31,000 in 1985 and fell to 20,700 two years later. Despite the odd surge, they have not recovered. Sales of the Range Rover, launched in 1970, were not enough to take up the slack - until its launch in the United States in 1987. Pre-tax profits, steady but never spectacular, dwindled into loss for two years as the company bore the cost of the change from its traditional markets into new areas.
The situation demanded action on several fronts. In 1985, 14 out of 15 manufacturing plants scattered across south Birmingham were closed down with the loss of over 1,000 jobs, and production was consolidated into the present single site at Solihull. As well as standard benefits like cutting 14 gatehouses and telephone exchanges, a key element of the rationalisation was saving one million miles a year on internal transport, which used to criss-cross south Birmingham on a daily basis.
The present site at Solihull, originally built to make aircraft in World War II, measures some two miles end to end, densely covered with the huge manufacturing halls, and row after row of completed vehicles ready for shipping. The serried ranks of standard products are broken only by a motley collection of customised vehicles outside the specialist paintshop - camouflaged models for the Army or Navy, others in police and ambulance livery, plus the Camel Trophy model - and an untidy ghetto of rivals to the Discovery, abandoned after rigorous examination and testing. And all the time Land Rover vehicles hum purposefully by on the plant's private roads.
Back in the mid-1980s the atmosphere was somewhat less optimistic. Reeling from the shock to its traditional markets, the company allowed the Japanese to steal a march on it. In 1983 Mitsubishi launched the Shogun, a mid-market four-wheel-drive (4wd) vehicle aimed at the leisure sector, which was followed as the decade advanced by the Daihatsu Fourtrak, Toyota Land Cruiser, Isuzu Trooper and others. Presciently, the Japanese had identified an enduring opportunity.
Research at Land Rover had noted the new sector being developed by the Japanese as early as 1983, but, says marketing director Russell, "we wanted to be sure it was not a hula-hoop trend". Learning from the Discovery experience, investment in market research has grown substantially since. Says Woodwark: "We spend £1 million a year on market research now, compared to £20,000 five years ago."
Market research then established that the best business opportunity for Land Rover was to develop the Range Rover, move it into the luxury sector and launch it into the world's biggest market, the US. The entry was a resounding success: Range Rover sales rose by 41% to 20,500 in 1987, and went on to overtake those of the Land Rover the following year.
It was not until 1986 that a multi-functional group, codenamed Swift, was formed to produce business proposals for entry into the leisure sector, initially in the UK and Europe. Once convinced of the long-term viability of the sector, Land Rover also had to ensure that its new offering did not damage the Range Rover in any way. Thus it began to emphasise the relative positions of the two existing vehicles to ensure that an identifiable gap emerged for the new vehicle. Says Woodwark: "We have to make sure customers understand the juxtaposition of the Discovery with the Range Rover. It must add value to the business. It's no good just substituting Range Rover sales with Discovery sales."
As world-acclaimed expert in 4wd vehicles, Land Rover was undeniably late into the mid-range market. Russell jumps quickly to the company's defence: "We could have been criticised for being late into the market if we had offered an also-ran product. As it was, in very rapid time - a record for the industry - we came in with a product that is seen as the best in the market." His confident statement is supported by various industry awards - and indeed by the relative sales figures.
Once the decision to plunge in had been taken, Land Rover pulled out all the stops. By the end of 1986 the concept had been approved. To meet the tight timetable for going into production, a new multi-functional team known as Jay ("We had a fetish for birds at the time," explains Russell, whose arrival at Land Rover from Peugeot-Talbot coincided with the board's approval) came together to manage the project through to launch.
Traditionally, the development process in the car industry is a sequential one, as Russell explains: "Usually the designer produces drawings, you build a clay, then ask the engineers if they can make it and then go into manufacturing - a relay race." With the Discovery everything happened simultaneously - an exercise entailing considerable risk, but justified by the time saving and vindicated by success.
Says the Jay team's manufacturing planning manager, John Rutherford, who is now involved in a similar role on another secret project: "The Jay team was a brand-new departure for the company - a group of people dedicated full time to produce (a new vehicle) in as short a time as possible. I first became involved with the clay model. Normally no one in manufacturing would have known anything at that stage. It would all have been totally hush-hush. But we reviewed the design in detail to ensure that it was feasible." Suppliers, too, were brought in at a much earlier stage to iron out problems in advance.
The development process was achieved in record time, largely as a result of the accessibility of the relevant disciplines: experts from manufacturing, engineering, purchasing, marketing, finance, timing and production planning were all gathered together in one building. "It was just a matter of leaning over a filing cabinet," recalls one member of the 50-strong team. "It made solving problems so much easier." Instead of the more usual four years taken by European manufacturers, the Discovery took just under three years to design, develop and get to launch.
Apart from the complexity of the development process itself, putting the Discovery into production meant a major reorganisation of manufacturing. Says Rutherford: "We had to put a new vehicle into a site traditionally producing only two models, and allocate space while keeping current production levels." The solution lay in the introduction of just-in-time (JIT). Some 60% of Land Rovers used to be produced as kit models, which tied up vast areas for stock and packaging. As part of the rationalisation process, JIT threw up space for the new model. In the paint shop, provision had to be made for the greater height of the Discovery.
The sense of involvement was great. Even now, members of the Jay team recall the era with pride; shopfloor workers still sport the fabric badge, depicting a jay, which those involved in the project were entitled to wear on their overalls. In 1988 a five-week strike among hourly paid workers over the biannual review of pay and conditions posed a serious threat to the project. It was just at the time when the first phase of vehicles was being built.
But, recalls the Jay team's engineering manager, John Bragg (now production director for Range Rover): "We didn't lose a single vehicle. Management were in the workshops in overalls being guided by the engineers. There was a real Dunkirk spirit." Bragg is emotional too as he recalls the moment when the first vehicle was driven out of the workshop. "There were tears in my eyes," he says, with scarcely a hint of embarrassment at his own sentimentality. "It was like the birth of a baby."
Affectionately known throughout the Solihull site as the "Disco", the Discovery's differentiating point lies in its interior. Says marketing director Russell: "The Japanese products at the time were very well produced but they belied their truck origins. We felt there was an opportunity for more of a car-like feel. We wanted to take the concept forward." Research had shown that rival vehicles fell down on their interior, particularly stowage, so from the outset that was a priority. There is a feeling too that the vehicle is designed as much for the passenger as the driver, with an airy, spacious feel and good visibility from the rear seats. In driving terms, power rather than performance appears to be the key.
Once launched, sales of the Discovery took off, easily exceeding pre-launch targets. Says Russell: "In the first year our UK sales target was 4,000 for market leadership. We achieved well over 6,500. We thought 30% would go to first-time 4wd drivers, but in the UK it was 60%" - clear evidence of healthy growth in the sector. Typical buyers are trading up from foreign cars like the Volvo estate, BMW3 series and Saab 900, and are in fact more likely to use the Discovery for towing a boat or caravan or driving to a snowy ski resort than for true off-road driving. But the opportunity for adventure is always there, a vital part of the marketing mix.
With sales this year continuing to outstrip the closest Japanese competition (the Shogun and the Isuzu Trooper) by well over two to one, Land Rover has good cause to be pleased with the youngest addition to its fleet. Coming from behind as the Discovery did is proof that British motor manufacturers and designers still have the spirit to fight back - and win - when they put their minds to it.