The pre-war motor industry was in its infancy and suffered from a lack of investment backing, high production costs, an over engineered end product and a saturation of small family orientated manufactures. Developments in the industry often came from pioneering engineers with components being imported off the continent for the British industry. Britain was lagging behind other European nations. The industry established itself in the inter-war period by relying on entrepreneurs and engineers, such as Herbert Austin who built the first four wheeled English car by 1900. Austin also built the first low horse-power car to substitute the motor-cycle side-car and public transport.
The pre-war industry had high production costs with poor managerial leadership with most manufacturers being family run, resulting in little asset growth within the company as profits were quickly distributed to employees or family.
[...] The taxes in Britain were so much higher due the implementation of the horsepower tax which taxed vehicles per horsepower. This meant it was difficult for the US to infiltrate the market and suited the low horse- power British motor vehicles. These taxes however placed constraints on the size of the market in the UK. To conclude the British motor industry overcame many of its pre-war difficulties by protecting its home market, by the use of tariffs and taxes and at the same time technically advancing dramatically. [...]
[...] Technical advancements reduced total-running costs to the industry dramatically. This was aided greatly by Government investment over the First World War and the work of entrepreneurs and engineers such as Herbert Austin. The market however was constrained to the middle classes due to high running costs and an acceptance of manufacturers there was no need to try and reach mass production, as the middle-income market was not stagnating. The market however only grew from the wealthy elite being able to afford cars in the pre-war industry, the market extended to all of the middles classes. [...]
[...] (1962) motor industry in Britain to 1914,' Business History p44 Church, R. and Miller, M. (1977) big three: competition, management and marketing in the British motor industry 19922-1939,' in B.E. Supple (ed.) (1977) Essays in British business history. Oxford: Clarendon Press, p181 Church, R. and Miller, M. (1977) big three: competition, management and marketing in the British motor industry 19922-1939,' in B.E. Supple (ed.) (1977) Essays in British business history. Oxford: Clarendon Press, p 167 Aldcroft, D.H. (1970) The interwar British economy: Britain, 1919-1939. [...]
[...] (1962) motor industry in Britain to 1914,' Business History p44 Aldcroft, D.H. (1970) The interwar British economy: Britain, 1919-1939. London: Batsford. p179 Church, R. and Miller, M. (1977) big three: competition, management and marketing in the British motor industry 19922-1939,' in B.E. Supple (ed.) (1977) Essays in British business history. Oxford: Clarendon Press, p 167 Allen, G.C. (1959) British industries and their organization, 4th edn. London: Longman. P180 Aldcroft, D.H. (1970) The interwar British economy: Britain, 1919- 1939. London: Batsford. [...]
[...] Only a wealthy elite were able to invest in the motor industry in the pre- war and early in the 1920s, the industry was still in its first stage on the diffusion curve. During the inter-war period the industry progressed from the first stage to the second stage on the diffusion curve. Market size was increased to the middle classes as a whole but it still only had a small target market in relation to the whole population of England, roughly 25% of the population. [...]
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