No offense to you Britons, but it seems to me that the demise of so many British manufacturers has much to do with their snooty image and stubborn insistence on building cars that the builder wants to build, but customers don't actually want to buy. Case in point: Lotus. The Elise and Exige are boutique cars the appeal to an extremely small group of hardcore enthusiasts and egotistical numbskulls who order lime green to be seen, but a product like that is never going to make anybody rich. Thus the new direction. Jaguar's stubbornness: bought out by foreigners and taken in a totally new, profitable direction. Land Rover, too. TVR ring a bell?
The British seem to be just as good at making ridiculous cars as the Italians, just not as good at making money with them.
The Elise is a bad example since at its release it basically did for Lotus as the Boxster did for Porsche (edit: tree'd by Famine).
Jaguar is a bad example too, especially since in the UK at least the XJ series has always outsold the BMW 7-Series, Audi A8 and Mercedes S-Class massively. Jag's main problem wasn't advancing with styling trends, and the fact that they've now done that isn't down to their owners (since Tata seem to have quite a laissez-faire attitude to Jag) but more down to them hiring Ian Callum as chief designer. Land Rover too, who've never really been unprofitable.
And again, TVR did well in the UK for the most part. Their main problem was not taking the brand beyond the UK. They specialised essentially in a British take on the muscle car theme and as such it's something that could have gone down incredibly well in the States, had they spent the time to develop cars that would pass U.S. legislation. As Lotus has more recently done.
I agree with your sentiments generally, you've just picked entirely the wrong companies to illustrate your point...
Where we fall down is just cars. Can anyone name the last successful British-designed and built (forget the money trail) small hatchback - the sector that sells the most cars Europe-wide? Or the last successful British-designed and built small family car? Let's be honest, the Mini was a cracker, but not quite the height of reliability (nor safety). The same can be said of the Escort (which got less interesting and less reliable with each generation) and the Cortina. Depending on to whom you speak, the Rover 25/200/MGZR and 45/400/MGZS will be held in high regard or given extreme disdain but they cannot possibly be classed as reliable. Elsewhere there's the Triumph Acclaim/Rover 200, Triumph Dolomite, Triumph Herald, Morris Ital/Marina, Austin Allegro, Austin Maxi, Austin Princess, Austin/MG Metro, Austin/MG Maestro - almost a rogue's gallery of utter banality and dreadfulness (okay, I have a soft spot for a Herald/Dollie, but I wouldn't want one as my only car).
The Rover 200 was the first that came to my mind, though as you said it's not the most reliable of vehicles.
The one which disappoints me now is the Rover 75, which to all intents and purposes was a very good car indeed - it's distinctive, really quite reliable, has a magic carpet ride, handles well (if not particularly sporty) and was priced well too. It's major failing was that it was launched a few years before retro actually became cool and totally misjudged the market. It was sort of fixed with the MG ZT which did quite well and then it got given a V8 which is a car I
really want (in either Rover or MG guise) but by then the rest of Rover's product line was taking them down the pan anyway and they couldn't afford to come up with a replacement.
I reckon twenty years down the line though the 75 line of cars will be considered one of GB's all time great cars. Definite future classic at any rate. And incidentally, the French and Japanese bought loads of the things, and the Italians classed it as the most beautiful car in the world in the year it was released.
It was only really the British press who inexplicably panned it...