Essay : Why did BMW buy Rover? The counterpoint
Motoring journalist Mike Duff explains why he feels that much of the anti-BMW feeling following the sale of Rover to the Phoenix consortium is completely unjustified.
BMW lost much in their six years controlling Rover – enough for the controlling shareholders, the Quandt family, to push through the sale of Land-Rover to Ford, following huge inward investment in the Tempest (facelifted Discovery) and 2001 Range Rover (Wolfgang Reitzle’s “company” car). BMW also learned an important lesson about UK politics after the huge frustration suffered by Bernd Pischetsrieder at the hands of New Labour.
BMW were so weakened by “The English Patient”, that there was a very real danger of the company being swallowed by Volkswagen if they didn’t jettison Rover when they did… Pischetsrieder wanted Rover to flourish under BMW; Wolfgang Reitzle did not. It caused a boardroom war and, in the end, both top men lost their jobs.
If BMW truly planned to use and dispose of Rover, would they really have planned to sacrifice the CEO and his deputy in the process?
Surely BMW were less than committed to Rover because they used a Chrysler engine in the MINI
The K-series is already life expired, and was meant to die with the 25 in 2005, the 75 going over to 1.8 and 2.0 litre ‘Valvetronic’ transverse fours at the same time or earlier. It is a perfectly adequate engine, of course, but lacks torque and is not certified for US emissions. Indeed, but for some very nifty spadework by post-split Rover, it wouldn’t even be certified for Euro IV. The Chrysler MINI engine, although a fairly rough old lump, is lower (making for easier packaging) and has good low-down torque – vital for selling cars in the USA and its emissions were (easily) certifiable there – including California LEV – which there’s no evidence a K-series could pass, however hard it was twiddled with.
Rover was never a viable BMW competitor.
There was minimal product overlap in very few markets. Even by the mid Nineties Rover’s sales were little more than nominal in all European markets except Spain, Portugal and Italy. None of which were big BMW markets at the time. The only real overlap was with the 600 and the BMW E36 3-series and possibly the 400 tourer with the E36 estate. Rover was also marketed in Germany, and I think also in France as a mainstream rather than a premium brand. The idea of Rover taking significant sales from BMW with any of its mid ’90s on products is – frankly – laughable.
Land Rover involvement in X5:
No, no, no… The X5 is based on the existing four-wheel drive 5-series ‘X’, the only technical transfer is the lifting of Hill Descent Control. (Which, incidentally, Toyota now offers a copy of on the Land Cruiser). There WAS substantial BMW engineering in the new Range Rover, but that’s a radically different argument. And before anyone says anything, the X3 is based on the 3-series ‘X’. While the Freelander is based loosely on various bits of Maestro.
Land Rover engineers might well have been shocked at the lack of off-road kudos of BMW’s X-products. But they certainly weren’t as shocked as BMW engineers were by the utterly terrible build quality of Land Rover products. Hence the introduction of QZ, BMW’s biggest gift to the company…
The dearth of new models pre-Rover 75
This is very true. But Rover’s far from overwhelming management was very much running the ship, coming from a basis of lightly re-skinning Hondas. The big question should be WHY the 75? It was already obvious that the Gen II 200/400 were rapidly going to fall behind class standards – and yet they were always supposed to be soldiering on until 2003/2005. The 75 was a vastly expensive project (not based on the 5-series – rather a unique platform) going into a market segment where the company was already having difficulty gaining ‘brand credibility’ with the over-priced and over-marketed 600…
The questionable marketing of the Rover 75
The 75’s misguided ‘Englishness’ was entirely a Rover call, as was a deliberate effort to market the car as being upmarket. Journalists were told when the 75 came out that it was ‘categorically not’ a rival for the Peugeot 406 or VW Passat! Shorthand to fleet buyers: go away, we don’t want you. Quite why BMW Group needed two upmarket brands, esp. as Rover had been bought to provide mass-market cars, is a mystery.
Land Rover gained so much – would this be so if BMW intended to sell it?
Land Rover gained an enormous amount from BMW. Indeed, without BMW, it is highly doubtful whether the company would still be around in present form (Rumours of an as-yet undisclosed ‘black hole’ in the finances still persist) BMW lost a vast amount on the engineering of new Range Rover, money it will not get back. Similarly the re-engineering projects for Tempest and Freelander don’t suggest the actions of a company intent on asset stripping and fleeing.
BMW invested a great deal in the UK – why do it if it wasn’t intending to stay?
And – of course – if BMW had been planning this all along then why on earth build Hamms Hall? Its very location was because the majority of valvetronics were meant to be going to Rover, Land Rover and possibly Mini 2… Instead of which, like the E-series, they’ve now got a state-of-the-art engine plant destined to run at below capacity for the rest of time…
MINI stayed with BMW – surely that was exploitation?
Taking MINI? Why not? How on earth was Rover supposed to market MINI around the world, with no proper sales network outside parts of Europe? Cowley certainly wouldn’t be working three shifts if it was knocking out MG Rover MINIs….
The alternative for Rover being considered by BMW seems to have revolved around building MINI and R75 on one site (probably Cowley), farming R35 and R55 out to low-cost foreign production and closing other site, sacking all staff there. R&D would have been mostly moved to Germany with just limited ‘optimisation’ staff in the UK – as with Seat in Spain or Skoda in the Czech Republic. Would Rover workers/supporters really have preferred that to what actually happened?
There IS a case that Rover’s hands are being unfairly tied in terms of limited market sector presence and the rights to the various brand names. But my personal take is that BMW acted very honourably throughout. During the period that certain people at Longbridge were scrawling swastikas over German-export Rover 45s (the logic is just SO incredible…) BMW AG was negotiating contracts with various stranded Rover Expats in Munich, including a close friend of mine who was offered extremely generous in-lieu-of-redundancy package funded entirely by BMW, which could have just bought him a single on Ryanair if so minded. He’s still over there.
And finally – BMW is not working on anything based on the aborted R35/R55. There might be some ‘technical leak’ into the forthcoming 2G MINI, but very little as the car will be based closely on the current model. 2G MINI will also be bigger, lapping perfectly against the BMW 1-series, which will make BMW a full range maker for the first time. Outside of MINI and MINI variants, the company has once again stated that it will not be moving away from rear-drive cars…