Stuart Nathan
Features editor
The UK’s newest automotive manufacturer faces an uphill – but not insurmountable – task, according to Stuart Nathan.
The news that chemicals manufacturer Ineos plans to launch an automotive arm to make a successor to Land Rover’s iconic Defender model is welcome, but somewhat perplexing. It’s not a situation that we at The Engineer can recall happening before, and with solid details of the company’s plans in short supply, there’s a lot of speculation.
Ineos is itself an atypical company. A fairly recent addition to the business scene, it was formed by acquisition, originally through a buyout of BP Chemicals’ commodity chemicals businesses in 1995. In the following years, the company bought out other commodity businesses from chemicals giants including ICI, BASF, Norsk Hydro and Solvay, which in most cases were sold by their parent companies so they could concentrate on businesses with higher profit margins. It is in the top 10 global chemicals manufacturers in terms of its sales, but unlike its fellow majors is a privately held company, with its chairman and founder Jim Ratcliffe owning 60 per cent of its shares.
Ratcliffe dominates the company, and it’s his enthusiasm for the Defender that is behind the move into automotive. When Jaguar Land Rover decided to stop producing the venerable workhorse 4×4, Radcliffe is reported to have tried to buy the IP from the company, but JLR refused to sell; hence the decision to set up a development and manufacturing project.
It is, of course, well outside the purview of The Engineer to offer business advice, and as we have stated before we are not economists. However, we must point out that this is no small thing that Ratcliffe is proposing. While new automotive companies specialising in niche vehicles have been set up in recent years, they have generally been small volume producers, while Ratcliffe’s proposal seems set to work in a higher-volume bracket. And although Ineos is an established name in the manufacturing sector, it’s hard to imagine two parts of the sector more different than chemicals and automotive.
Automotive is one of the archetypal parts of the discrete manufacturing industry; it makes individual items – namely, cars – from components in a series of individual steps. To put it crudely, it makes things. Chemicals, by contrast, makes stuff; quantities of undifferentiated material, whether solid pellets of polymers, tanks of liquid or gas. Its facilities are plants, not factories and its suppliers other stuff-makers or primary extractive industries rather than smaller manufacturers. The supply chain networks for the automotive sector are complex and can take many years to establish; if Ineos plans to have its new product on the market by the end of the decade, it doesn’t have much time to get its supplier network into place.
The mix of skills needed to build cars is also very different from that needed for a chemicals manufacturer. While both industries need a variety of engineers working together, process engineering and the types of control engineering needed to run a chemical plant have little common ground with more traditional production engineering, and again the company faces building up from scratch.
What Ineos does have in its favour is money. It will cost some hundreds of millions of pounds to set up a new large-scale automotive manufacturer, but in interviews Ineos board member Tom Crotty has indicated that the company is well aware of this and prepared to spend.
Of course, news of a new large-scale manufacturer is welcome. The company has not yet announced where its manufacturing base will be, but as Jim Ratcliffe was one of the few UK industry leaders to publicly support leaving the European Union, we can probably say it’s more likely than not that he will want to set up manufacturing in the UK, and indeed we have already seen speculation of plans for a factory in the north-east (which would make sense, with the existing automotive supply chain in the region).
It is perhaps slightly disappointing that the product plan is for a somewhat old-fashioned vehicle. The point of the Defender is its lack of frills; it is a solid robust brick of a car, designed to be hardworking and resilient. An article in the newspaper City AM said on Monday that the vehicle was likely to have a diesel powertrain bought in from another supplier to ensure that it would be able to work in the harsh conditions of sub-Saharan Africa, where access to well-equipped mechanics would be unlikely. So R&D and new technology are unlikely to be high on Ineos Automotive’s priorities; another contrast with the rest of the automotive sector which is very much concerned with leightweight materials, low carbon and electric powertrains and the move towards autonomous operation.
It’s going to be a challenging period for Ineos. And with Land Rover planning to unveilI its own successor to the Defender in the near future, Ineos is going to face stiff competition. But Ratcliffe is certainly correct that JLR left a gap in the market when it stopped producing the Defender, and The Engineer will view with interest his progress on entering this new market.
Unfortunately too small. Couldn’t get my 6’6″ frame into the cabin of a Defender. Discovery was a very tight squeeze, couldn’t move once I got in, couldn’t lift the leg to hit the brakes. So, whatever Land Rover is doing in the future, I’d get a Honda, Suzuki or Skoda.
Nature abhors a vacuum. so if not Ineos, some other manufacturer will step in. Good luck, the Defender is an icon that actually works, so whoever replaces it will have their detractors, but if it works well these people may become its biggest fans.
In an interview with Ratcliife on Radio 4 earlier this week, he claimed expected volume of 40,000 to 50,000 vehicles per annum. It was also very clear this would be a workhorse vehicle following the ladder chassis construction method, using basic technology that was robust and user serviceable to an extent. Unfortunately much as I love the Defender it as with the rest of the Land Rover stable have become less suitable to harsh environments where a ‘field fix’ will keep you going even under the worst conditions. If Ineos can crack that they open themselves to a global market such as the older Series Land Rovers enjoyed not only due to reliability but due to ability to keep them going in the worst conditions with the most basic of tooling. In the interview it was also clear that this was a target area for Ineos.
“The news that chemicals manufacturer Ineos plans to launch an automotive arm to make a successor to Land Rover’s iconic Defender model is welcome, but somewhat perplexing. It’s not a situation that we at The Engineer can recall happening before, ”
John Bloor (John Bloor Homes), and Triumph motorcycles. Sometimes a completely different perspective can create a winner. (it can of coarse also cause things to go down in flaming disaster)
Nokia was making wellies before starting with mobile phones.
Whilst your assertions about the differences between chemicals and automotive are correct I am not at all sure that I agree with your conclusions.
Firstly, Elon Musk knew nothing about automotive (his background is in software) when he started Tesla but the results are causing conventional automotive companies to completely re-assess their model line-ups and model features. He has managed to shake up a very well established industry in a way that no-one believed possible.
Secondly, the Defender had almost completely disappeared from 3rd World markets as it was too expensive when compared to (predominantly) Japanese 4×4 pickups. In fact, a look at what UK farmers tend to drive these days will show that 4×4 pickups have replaced Defenders in all but the most challenging areas due to lower costs and better on road comfort.
If Land Rover behave true to form then the ‘New Defender’ will also be too expensive for the Third World although it may recapture some of the UK rural market from the Japanese (and it will definitely sell well to aspiring weekend warriors).
Which brings me back to Jim Ratcliffe and his automotive dream. Is it going to be difficult to bring a new, rugged, simple, low cost 4×4 to market? Yes it is. Past history suggests that many have tried and few have succeeded. Does Jim Ratcliffe’s background in chemicals and the imminent arrival of the ‘New Defender’ make it more difficult? I don’t really see any evidence to suggest that it will.
I agree with Edward and disagree with Stuart Nathan’s comment, “Chemicals, by contrast, makes stuff; quantities of undifferentiated material, whether solid pellets of polymers, tanks of liquid or gas. Its facilities are plants, not factories and its suppliers other stuff-makers or primary extractive industries rather than smaller manufacturers.” To make this “stuff” we, in the chemicals industry, turn novel ideas into successful equipment designs, working with vendors, and manage multi-million dollar projects to their successful conclusion. We are also very aware of the importance of quality and market demands. I think Jim Ratcliffe will assemble the level of expertise needed and has the right approach to make it a success, as his team has done with their numerous chemical plant purchases.
Sure it can be done. Sell to developing countries where vehicle emissions aren’t so strict and you need boxes of expensive electronics and bottles of AdBlue every other fill-up.
It would be relatively easy to knock up a basic ladder chassis, populate with simple and reliable components and drop some bodywork on top (different types if you like too). If you want in-field repairability then fancy electronics are a no-no anyway. Just look at Gordon Murray’s OX vehicle (https://www.theengineer.co.uk/gordon-murray-designs-istream-technology-wins-dewar-trophy/) if you want some inspiration. Swap the flat-pack for some basic industrial steelwork and you’ve got a Defender-like vehicle for maybe a 10th the cost of the modern equivalent.
The issue to me is where this will be sold and who will be buying it, as this will be crucial to success.
Well as an ex ICI employee, 27yrs, what Mr.Ratcliffe will bring is a new attitude. The ICI was steeped in the old boy network, this was something alien to Ratcliffe who made complete sites become individual ‘stand-alone’ businesses, not always for the greater ‘good’ However it does focus the mind and profit culture. I daresay he will succeed but if he can get the model to profitability how long he will keep it is another issue altogether.
Land Rover have for years been progressively moving up market, even their entry-level vehicles have done so as well. Since 1948 they have capitalised on the (relative) robustness, simplicity and field repairability of the Defender class. Helped by their over-dependance on the British military market, which provided considerable marketing exposure. The key selling point has been eroded by dependance on complex electronics, complex constructions techniques, and a complete failure to upgrade the known weaknesses, such as chassis rusting, water ingress, fragility of the transmission, etc. Given the years since they dropped the Defender they are unlikely to regain that world beating position without recognising that dedicated dealer chains are not universally available, and taking account of the consequent cost of repairs. Toyota Land Cruiser has often been the vehicle of choice in the third world for the last couple of decades, and we are seeing an increase in the availability of competitors such as the upgraded Ford Ranger which are now available in UK. Despite having owned several Land Rovers, and used (and abused) many more I fear that whatever they now produce will not be able to compete. Sadly I suspect JLR have missed the boat.
Land Rover is a luxury now. With wages stagnating for years now, they will need to cater to the armoured car business for ISIS, drug dealers and third world dictators to earn some money.
I am currently re-building my 1940’s Landrover and two things stand out:- the uncomplicated simplicity of the machine, and the fact that modern fittings and methods – learned and developed over the intervening 67 years – would make it even simpler. Current safety and emissions requirements should be reasonably simple to accommodate, particularly if the engine and its controls are bought-in.
Mr Ratcliife does not need to know much about the motor industry; he just needs the skills to find those who can design & build his project and then keep it focused.
In truth, the vacuum that he is proposing to fill became apparent when Landrover started their upmarket movement; perhaps at about the time that ‘Landrover’ was changed to ‘Defender’. The market for this vehicle is definitely a niche, but a large one.
Ratcliife’s great advantage will be a freedom from convention and history – a fresh start which could give him the needed edge.
There was the Land Rover DC100 Concept back in 2011, but it was shelved I think.
https://www.theengineer.co.uk/issues/19-september-2011/land-rover-unveils-off-road-successor-to-the-defender/
If PSA buy General Motors Europe, maybe they’ll close the Vauxhall plant at Ellesmere Port.
There’s a ready-made vehicle production factory with local labour and an established supply chain.
Might I suggest, that if you want to build a new Defender, and you have limited experience designing cars, you’d go electric?
It would be perfect for the Defender. Four electric motors, one for each wheel, with individual traction control, would provide unbeatable off-road performance.
A 40KWh battery pack, fully sealed, would provide about 80 miles of range, and enable fully water tight operation. Add the winch and a propeller, and the thing could double as a boat.
A 1 litre petrol or diesel engine would work as a range extender and generator, extending the range to hundreds of miles, and providing a power supply for the encampment or the mobile milking units or whatever. Perhaps make the 1 litre engine removable – that would give more space and make servicing easier.
With electric drive it could go anywhere, quietly. Useful for following big Game, or not distrubing the neighbours when farmers do what farmers do at 5am.
And not only that, your typical owner could drive through town to the supermarkets, charge it up, and get back without using petrol.
Those were exactly my thoughts. I’m not too sure about the efficiency/need/desirability of a (flexible) ladder chassis. Clever motor speed control could give enhanced electronic diff lock compatible with Ackermann (Darwinian, actually) steering to command that all the wheels turn at exactly the correct speed in the correct direction to avoid slip and maximise traction in a way that conventional diff locks can never do.
Electric will not work in the wilderness, which is the prime marketing and third world market option. A ladder chassis is robust, and allows for the myriad customisation options, if only they were galvanised or properly undercoated. Monocoque chassis even if having ladder style reinforcement always twist and distort in extremis. The defender chassis does as well but the stress on the actual body is mitigated by the poor panel alignment, flexible panel fixings and elastic body mounts. Not entirely sure how a 1 litre 40kw engine would cope with shifting 6 tonnes! Even the pre-defenders had an 80bhp engine, and they struggled. A robust and long lasting vehicle will inevitably be heavy. And the Defender’s 2 tonne pushed by a 120bhp engine always struggled. What is required depends on the performance spec. If you start with a constrained engine, transmssion and body structure then inevitably there will be constained performance and capability. The question depends on the design criteria, if the new vehicle is to be a replacement for Defender, competitor to Land Cruiser/Ranger then a lightweight vehicle with a 40bhp engine especially electric just will not cut it at all.
Why would electric not work in the wilderness? Electric motors are far more rugged and reliable than an internal combustion engine. They will work everywhere an ICE will, and many places where it won’t (in a vacuum? under water?).
The 40KWh is a measure of energy storage. Not power. You could probably get 90KW of power out of that – more than ample at off road speed. If you want to run at 90mph though, you might need to run the 1 litre petrol engine in parallel – probably pushing out a combined 200 bhp. Though keeping the petrol engine in series would be simpler and more reliable. So you could offer a range of battery options: 30, 45 or 60KWh.
I wish every good luck to the project……. but, As JLR would not sell the IP I expect the names “Landrover” and “Defender” will not be available. Will potential customers be inspired by an “Ineos”?
When John Bloor branched out into motorcycles he had the “Triumph” name to help sell his new product. Would he have been as successful with “Bloor” motorcycles?
I wish Ineos all good luck in this venture, what ever power method they go for.
Regarding names, what about ‘Landranger’ or has that been used already?
Mercedes doesn’t use any names. They call their new one: 6X6.
LandRanger are ordenance suvey maps I believe
The name Defender was introduced as a sop to the military who bought vast quantities of them until it was found they were unsuitable in places like Iraq where IEDs were a constant source of death and destruction
I recall one of the earliest carbon-fibre manufacturers saying “we didn’t know how ignorant we were in processing textile related structures when we started: that’s why we have been so successful!” Yes, there are many differences between what I have always called ‘process & flow’ activities and metal bashing and assembly: but the question I have always asked a new client is ‘what are you good at?’ They usually start off telling me that they make X orY or Z : “That is NOT what I asked you! What are you good at?” Discussion usually elicits that they are good at purchasing, or sales or keeping stock levels low….ie totally transferable skills and abilities. It is these aspects of any business which hold the key to the future: and open up broad fields for successful diversification. Ask yourself the same question: you will be amazed at the answers.
Yes, however I am not sure which category that fits in “Huge success in an unrelated industry!” up to about 2010 or “Unmitigated and Flaming disaster” since LOL
Anyone remember the Africar? -the designers had noted the thousands of rusting metal wrecks scattered around the developing parts of Africa and believed that a wooden (I am NOT joking) car chassis would solve the issue: albeit with ‘proper engines, wheels, transmission… [Perhaps they were thinking about the Mosquito aircraft?] I believe the first batch lasted about a week! when the uneven rutted roads of veldt and outback were attempted.