Around the World : Bulgaria
There was an operation to build Maestros in Bulgaria, and we have the full and exclusive story of how it came together.
Thanks to an ex-Rover Group executive, we have been able to piece together the story of the Roadacar assembly operation in Bulgaria and conclude why it failed in the way it did.
RODACAR : Full of Eastern promise…
After years of consistent retreat, the Rover Group found itself in comparatively safe hands during the mid-1990s. Years of tight, efficient management and careful financial control under the stewardship of British Aerospace (BAe) had instilled a climate of careful spending.
While production of the Maestro and Montego was being wound down at the Cowley factory in Oxford, plans were afoot to set up an assembly operation overseas. Various options were discussed but, in the end, a deal – which had initially been led by the Bulgarian Government – was concluded to set-up a KD (Knock Down) assembly operation in the city of Varna on the Black Sea coast.
Varna was seen as being ideal for the transport by sea for parts from the UK until locally sourced parts could be developed and proven. The programme to create the new factory was known in the UK as Project Enterprise and, as former worker, Robbie Barnes recalls, these were interesting times.
‘I was a member of Project Enterprise,’ he says. ‘It consisted of eight Cowley guys and a couple of BAe engineers. We went to Varna in January 1994 and were immediately faced with a derelict site that adjoined the Vamo factory. Our remit was to provide a car assembly facility for the production of Maestro cars from KD kits.’
A potential site for the factory had also been identified next to a factory that, prior to the collapse of the Berlin Wall, manufactured forklift-trucks for the whole of the Eastern Bloc. Some local labour expertise therefore also existed. The plant was expected to produce 10,000 cars annually, and investment in the plan was estimated at $20m – the biggest foreign investment in Bulgaria thus far since the end of the Cold War.
Robbie recalls, ‘we were under incredible budget constraints – imposed by UK-based management who never actually set foot in Bulgaria. There was an ongoing process of assessing UK-based underused or redundant plant and machinery that could be suited to low level, but good quality assembly.
‘We also had to undertake a severe learning curve in how to deal with Bulgarian contractors Then we had to build trust with other well-connected locals, and maintain a single focus on the task in hand when many Rover officers tried to interfere in matters considerably outside their knowledge range.’
The factory building was started in late 1994, and volume production commenced in June 1995. The RODACAR Company was 51 per cent Rover Group and 49 per cent Daru Group owned. Daru was a Bulgarian company that owned a bank and also were the main agents for BMW in Bulgaria. Rover Group provided the manufacturing expertise and Daru Group provided the sales expertise/outlets for the Maestro.
Varna was opened by the Bulgarian President, Zhelyu Zhelev, on 8 September 1995, exactly on schedule. The British Ambassador to Bulgaria (Roger Short) and various senior Rover Group board members also attended. By this time the factory was producing quality vehicles successfully to projected volume, cost and quality targets – and, most importantly, the total project came in on time and within planned budgets.
The production line was staffed mainly by Bulgarian engineering graduates, who were all very keen to learn about car production. Another manager close to the project says: ‘The co-operation between the in-country team from Rover Group (ex-pats) and the support from Cowley Manufacturing Engineering was absolutely first class.’
That would probably explain why the Varna-produced Maestro was ‘at least’ equal in quality index to the last examples built in Cowley – a fact confirmed by a Rover internal quality audit. (Ex-pats would probably say it was better). Robbie confirms this: ‘The crucial objective that we had in January, 1994 never left us. Our task was to build an assembly facility that would not only meet the Maestro in Bulgaria requirements, but meet quality levels demanded by Rover.’
Another manager explains why. The factory was fully-equipped and state of the art. ‘It had a Paint facility, Trim and Final Finish, Rolling road, PDI – and was a total entity of factory and its workers, it all came together excellently.’
However, the car failed. A combination of weaknesses in the sales and marketing strategy, uncompetitive pricing for various reasons and the arrival of a serious rival in the form of the Skoda Felicia proved to be the death-knell for the Maestro. The new Skoda particularly hit hard – it was more modern, priced slightly lower and also had better aftermarket support.
Robbie says that external forces were partially responsible for this, and not just Maestro product weaknesses. ‘Our final visit was in November 1995 when we formally signed off the facility to the RODACAR team. While in Varna on that visit, one of the key members of RODACAR was tragically killed in a road accident in Serbia. That person was the vital, and only link, that had existed with the Bulgarian Government. The knowledge, and years of political nurturing, went in an instant.’
As for the competition, Skoda, by then VAG-owned, imported the Felicia from Czechoslovakia to Bulgaria at 50 per cent of normal import duty, whereas the Bulgarian Government refused to action a previous commitment to reduce the import duties on Maestro parts imported from the UK, while local sourcing was established.
Our other contact added: ‘There was also the non-commitment by the Bulgarian Government to honour substantial, previously promised, departmental orders for thousands of the vehicles – a measure that would have raised the profile of the Maestro in Bulgaria.’
Robbie agrees. ‘There was that, and a mixture of not really understanding the local market and being somewhat complacent when competitors knocked on the Bulgarian door. These were all factors that contributed to he project’s rapid demise.’
Opinion is that the major causes of closure were the previously-mentioned concession to Czechoslovakia/VAG for importing the Skoda, the reneging of the government to temporarily ease import duty on Maestro parts from the UK and the refusal to confirm major government orders.
Production ceased on 4 April 1996, after 2200 cars had been built – when the factory was mothballed, 250 assembly workers lost their jobs. Several years later, the unfinished cars and some of the production facility were returned to the UK, where it was subsequently sold off to Parkway Services in Ledbury. The sad thing is that Varna could have been a useful addition to the Group’s armoury despite the failure of the Maestro: ‘I could never understand why Land Rover never picked it up as a KD plant for Eastern Europe. I know it was proposed by a few people.’
In the UK, many people within the company held the opinion that the Bulgarian operation failed because it was poorly managed. One insider told us: ‘It’s interesting, but also rather puzzling to hear such positive reports about Varna. The word coming back to Canley was that it was near impossible to work with the Bulgarians.
‘They didn’t turn up for meetings and, if they did, they never did the things they’d committed to. They had no concept of business as we know it. I was told that production never really got off the ground. The photographs I was sent of the factory didn’t look remotely world-class, but rather derelict and run-down…’
The truth would appear to be somewhat different from that widely held opinion – the factory cannot have been derelict, as it was purpose built for the job, and the local engineers and workforce were all keen according to our executive who was intimately involved with the project..
Whatever the case, the end of the Maestro’s production in Bulgaria was a tragedy for the local economy: ‘It was devastating for Varna, and also for Rover Group, to close what was a first-class manufacturing facility with a well-trained, motivated work-force which had produced to planned performance levels. It had also been the Rover Group’s first overseas venture for many years.’
Robbie says that the team which oversaw Varna are all still in touch with each other. He says, ‘Back in 2014, the last time we ran a newsletter for the team, the Vamo site had been bulldozed and replaced by a shopping centre. The RODACAR site is now a Bulgarian version of B&Q.’
With thanks to an ex-Rover executive and Andrew Rozeik for their help in compiling this feature.