Rover group puts its foot down

By ALASTAIR SLOANE

Rover Group, the British carmaker ditched by BMW after six years of multi-million dollar loses, is pulling out all stops to tell the world it is back in business.

But not as the Rover Group. It will soon begin trading as MG Rover Group Ltd.

"Given that we are establishing a new company, the opportunity has been taken to reflect this in a new name which emphasises that we are totally committed to the design," said the new group's chief executive Kevin Howe.

"For the past 20 years, Rover Group has been run by someone else - either the British Government, British Aerospace and, more recently, BMW.

"The scale of the business was determined outside of Rover Group, hence the organisation has always been chasing someone else's ambitions. MG Rover Group Ltd is now an independent British carmaker, which is firmly in control of its own destiny."

The new company starts with a debt-free balance sheet and revenue streams which include car sales, parts, accessories and financing. It also benefits from more than $10 billion of investment by the previous owners.

BMW bought the Rover Group from British Aerospace in 1994. The package included four-wheel-drive specialist Land Rover and sportscar MG.

The German company sold its holding earlier this year. Ford bought Land Rover and a British investment group bought Rover and MG.

Last week the new company started producing Rover 25, 45 and 75 models, plus the MG roadster, at its Longbridge assembly plant. Next year, the plant will build the 75 estate and a range of MG sports saloons.

"The MG Rover Group organisation's overhead have been significantly reduced," said Howe.

"When you consider what MG Rover Group Ltd is today compared with last year, it's a company with two thirds of the volume potential, but a fraction of the overheads.

"The company now operates out of one site instead of three - or the seven or so if all the premises Rover Group previously used are considered."

Howe and his executives are talking to several organisations about looking after the Rover and MG brands in New Zealand. Meantime, BMW New Zealand are minding the store.

"Before BMW sold the Rover Group it spent millions of pounds building new models with uncompromising levels of quality," said Howe.

"We currently have a superb range of cars, including the award-winning 75.

"Interestingly, the Rover 45 - the replacement for the 400 - actually had the lowest warranty costs out of the whole of the BMW Groups's product portfolio."