Essay : BMW – Right owner, wrong boss?

Carole Nash Classic Insurance Specialists

Keith Adams

pischetsrieder

You’ll find that spending time reading Ian Nicholls’ excellent set of stories about Jaguar’s fortunes in the 1990s will probably get you thinking about Rover and its time spent under BMW’s wing – and the contrast in style between the Americans and Germans. When the deal between BMW and Rover’s parent company, British Aerospace, was signed in January 1994, few people would have believed that, within six years, the dream would be over – MG and Rover would be sold to a Midlands-based management buy-out and Land Rover would be reunited with Jaguar, by being sold to Ford.

It all looked so promising in 1994. BMW Chairman, Bernd Pischetsrieder (above), was a staunch Anglophile, and had deep confidence in Rover’s ability to do its bit, be a success in its market sectors and allow the BMW Group to grow into a million-plus cars a year operation. With scale would come survival in what was proving to be a tough time in European car manufacturing. As the great-nephew of Alec Issigonis, Pischetsrieder saw himself as a natural figurehead for Rover, someone who wanted its rich heritage and glorious legacy marques to shine though into the next millennium.

This was not a view shared with BMW’s then-engineering supremo – and one-time heir apparent to the chairmanship – Wolfgang Reitzle (below). His view of Rover was that the UK operation should have seen the expansion of MINI into a small/medium car brand in its own right, MG manoeuvred into a larger sports car brand, Land Rover expanded, with the jewel-in-the-crown Range Rover pushed into the top market slot, as a British alternative to the Mercedes-Benz S-Class or Audi A8. He did not want any overlap between Rover and BMW and, equally, he wanted to steer clear of the mass market.

You’ll notice there’s no sign of Rover in there. No, because Reitzle believed that it wasn’t needed – and that Longbridge could have been made viable with the addition of UK-produced BMW 2 and 3 Series models alongside a larger MINI range. As far as Reitzle was concerned, Rover’s continued existence in the volume car business was simply tarnishing the valuable brands in the UK portfolio: MINI, MG and Land Rover. As Pischetsrieder and Reitzle had been rivals for the top job, and the latter lost out in 1993, the seething Wolfgang was keen to distance himself from Rover. He was all too happy to see it run by the UK team with Pischetsrieder’s blessing.

Wolfgang Reitzle

As well as having a huge amount of trust in the capabilities of the UK management team, headed by John Towers, Chairman Pischetsrieder backed Rover fully to have the eventual ability to reinvigorate its model range with BMW’s generous investment. He ensured that Honda remained on-side, allowing the continued manufacture of the existing Anglo-Japanese range, while pushing the UK team into coming up with a viable future product plan.

This was not actually as straightforward as it seemed in 1994-’95.

In January 1994, the product range flattered to deceive and there were problems across the board:

  • The Mini was selling in small but steady numbers and enjoyed a strong image, especially in Japan, France and Italy, but was in desperate need of replacement.
  • The Metro/100 was still selling strongly in the UK but, following the collapse of talks with Ford on a Ka/Metro Joint Venture project, its future looked far from certain.
  • The 200/400 was months away from being replaced in a confusing two-prong strategy that would see the R3-generation 200 straddling the Metro and lower reaches of the old 200 (R8) range. This car was initially penned as a Metro replacement, combining R8 underpinnings, UK styling, and a Maestro rear end.
  • The 400 (R8) was still selling strongly, but would be replaced by the Honda-based 400 (HHR) in both hatchback and (later) saloon form.
  • The 600 had been launched in 1993, and was Rover’s most desirable model at the time. It was also the most closely related to Honda, and tied to both costly royalty payments and a deal that precluded it from being sold in the USA.
  • The 800 has been facelifted in 1991, but was based on Honda underpinnings not used in any current models. It had also recently been – humiliatingly – withdrawn from the US market in Sterling form.
  • The MG RV8 had recently been phased out, and the MGF was months from introduction. It was part of a Joint Venture with engineering group, Mayflower, which would supply the bodies.
  • The Land Rover Defender remained in production and the Discovery was selling strongly. Build quality would be these two cars’ most apparent Achilles’ Heels.
  • The Range Rover was on the wind-down phase in readiness for the launch of the upcoming Project 38a, and despite being in production since 1970, its image was still riding high.
  • The Maestro and Montego – yes, both were still in production, much to Bernd Pischetsrieder’s surprise.

rover-range

Although any range photo (above) of the Rover Group’s line-up would have looked strong in 1994, the reality was that it was hugely compromised, both by its dependence on Honda and the effects of years of underinvestment by former owner, British Aerospace. The future model programme was looking quite bleak, and it’s telling that Rover and BAe’s bigwigs had been gently putting out the feelers for a new owner since 1991-’92, when the parent company’s finances were struggling the most with the cash-hungry carmaker. That’s why BMW’s £800m buy-out really was great news for BAe.

The contrast between Ford/Jaguar and BMW/Rover became most apparent in the early months following their respective buy-outs. Where Ford wasted little time installing its own management at the top of Jaguar in 1990, and quite publicly made it clear the leaping cat needed significant development in its factories and product line-up, BMW appeared to do very little in 1994, simply saying it trusted Rover, and that there would definitely be new Minis, Rovers and Land Rovers.

Wolfgang Reitzle was not really that interested in steering Rover Group towards BMW, so it was down to UK boss John Towers and his team to come up with a cohesive model development plan – and that meant that new model development would take place in the UK, with regular updates fed back to Munich.

r8gallery_07
The brilliant Rover 200/400’s replacements weren’t nearly as successful, and needed
axeing far too 
soon after they were launched

The trouble was that there were conflicting issues, and all needed rectifying sooner, rather than later. For one, Rover’s sales were already beginning downward slide after a strong 1989-’91 and, as BMW had bought the company for volume, the most logical first step would be to concentrate on the mass-market mid-range cars.

However, the new R3 and HHR 200/400 ‘Portfolio’ models were nearing introduction, and Honda had agreed to stay onside (thanks to some impressive manoeuvring by John Towers) in allowing BMW/Rover to continue building them with lower royalty payments. The trouble was no one at the time could have predicted that they would not be the success that the outgoing R8 had been.

So, with the midliners likely to stay around until the millennium, the Rover 600/800 and Mini replacements were pushed further up the queue. This was an interesting strategy and, again, brought about by necessity, rather than desire. The Rover 800 was already pretty much past it in 1994 and, as a flagship product, it was not performing at all well.

The 600, on the other hand, was not making much money for Rover and needed replacing for logistical rather than marketing reasons – so, what became the Rover 75 (R40) was pushed into the job of replacing both, even though it was initially conceived as a replacement purely for the 600.

The Mini (R50) replacement programme was really just finding its feet in 1994, and it wouldn’t be until November 1995 that a proper strategy was signed off. As for the 200/400’s replacement (R30), that was kicked into the long grass in the face of an approaching storm in Europe, centred in Germany. It would not see the light of day, other than minor elements of it finding its way into BMW’s E87-generation 1 Series.

When John Towers memorably quit his job at Rover on the 1995 TV programme When Rover met BMW, it was Wolfgang Reitzle who was drafted in as his replacement as the UK Chairman. Seen as a hatchet man by the UK unions and workers, an ever-strengthening Reitzle would be able to exert his influence on Rover – even if his plans for it would never see the light of day.

Rover 200/400
In the mid-1990s, this overpriced pairing helped seal Rover’s fate

Between 1994 and 1997, Rover’s sales had been falling away. In the UK, market share had dipped to below 10 per cent for the first time, while in Europe, it was fading even more quickly. This was manifestly down to both the Rover 200 and 400’s inability to match the success of their predecessors – partly because they were less appealing, but mainly because they were both priced way above their ability – the supermini-sized 200 had been given an Escort-sized price tag, and the 400 had been priced to compete with the Ford Mondeo.

The Mini remained popular and the 100 was doing its bit, but Rover wasn’t buttering its bread thanks to the underperfoming 200/400. Bernd Pischetsrieder was being proved as wrong as Reitzle had looked increasingly correct. The fact that Land Rover was still making huge amounts of money at the time (even if it was largely being negated by massive warranty costs) also showed Reitzle was right. He threw much of his energy into the L322 Range Rover – ensuring that it would be the flagship that Rover desperately needed. A shame it would end up being Ford that would benefit…

The slide from the 1997 Frankfurt reveal of the Mini (above) to the 1999 talks with Alchemy and the eventual sale to Phoenix in 2000 was shockingly swift after what appears to have been a fair bit of intransigence under Pischetsrieder and Towers in those early days.

That, therefore, brings us back to the original question posed at the top of the feature – was the BMW takeover a good thing that was badly managed? After all, it took Ford more than a decade to get Jaguar back on to the path of recovery – and, even then, it took a couple of wrong turns before ending up where we are today.

We now have a range of MINIs based on a BMW platform shared with the 2 Series Active Tourer, which takes in the old supermini and mid-range markets. Although looks aren’t on its side, the F56-generation MINI and its Clubman and Countryman cousins easily span the market sectors the old Mini Cooper, Metro/100, 200 and 400 occupied.  We also have a range of Land Rovers which now spans the traditional Rover 600 and 800 sectors – with the Range Rover now sitting unchallenged at the top of a very impressive model line-up.

Ironically, and to prove that what goes around comes around in the motor industry, it was Reitzle who latterly oversaw Ford’s development of the L322-series Range Rover under Ford’s ownership, as the Chairman of the Premier Auto Group.

Would BMW’s tenure of Rover have been more productive and long-lasting had it taken Reitzle’s course in the first place instead of the one chosen by the well-meaning, but ultimately misguided Pischetsrider, who led us to the lovely (but unsuccessful) Rover 75 and the retro that came with it? Would Reitzle’s idea of being more brutal with with Rover in a manner similar to Ford and Jaguar have been more effective?

Would swiftly killing the Rovers to supplant them with UK-made BMWs while the MINI line-up expanded and Land Rover blossomed have been the more painful, but ultimately longer-lasting, ideal for the British car company? Certainly, it would appear that this vision for the UK marques has played out in the 2010s exactly as Reitzle had envisaged.

cotd2000-2010_03

Keith Adams

Keith Adams

Editor and creator AROnline at AROnline
Created www.austin-rover.co.uk in 2001 and built it up to become the world's foremost reference source for all things BMC, Leyland and Rover Group, before renaming it AROnline in 2007.

Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...

Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.
Keith Adams

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57 Comments

  1. Wrong owner, eg BMW could not get its head around the Japanese philosophies Rover inherited from Honda and it didn’t want to appear too ruthless despite its ultimate aims? Would Chrysler (before it ran out of cash) or Ford have done a good albeit tough job without the BMW political infighting? Would a Honda JV have worked out (possibly even hiving off Land Rover and Mini to BMW?) I’m not convinced that the 75 was a failure, despite horribly inaccurate marketing predictions, eg both Nanjing and SAIC chose to put it back into production in a developed form although the market for 4 door saloons was tanking due to the rise of SUV’s. The failure of Portfolio was forseeen – there was a distinct lack of enthusiasm for them when shown internally to Rover employees.

  2. The wrong boss was Towers, an inept conman who should have been out the door and replaced by a BMW exec on day one. With the benefit of hindsight Reitzle’s strategy was absolutely bang on and pretty well what happened with Mini and Landrover albeit the latter through Tata ownership. If he had had his way this website might not have been needed – to continually mourn the loss of MG and Longbridge that would now have been flat out building BMW’s – although Rover would have still needed tears to be shed.

    • Nice post. I agree but I feel that Pischetsrieders strategy would have eventually borne more fruit over the longer term for BMW group and the UK.

      Reitzle’s strategy seems to be sound with hindsight and would have given quicker, albeit UK publicly harsher results.

      Was Reitzle a master of strategy and understood that BMW group could not go the distance to turn around the entire basket case that was Rover group or was he just out to undermine his arch rival Pischetsrieder?

      We will never know, unfortunately.

    • @ Paul:

      Quote: “The wrong boss was Towers, an inept conman who should have been out the door and replaced by a BMW exec on day one.”

      John Towers had joined the Rover Group in 1988 in a senior position and would assume the CEO position in around 1992. In that time he had played a significant role in supporting forthcoming new project developments such as the MGF and R3 Rover 200 Series, as well as other initiatives to either strengthen the existing model line-up or create new concepts for possible future production. At the same time Mr Towers was also keen to strengthen links with Honda. All this was despite the fact Rover Group was chronically starved of investment from owner British Aerospace.

      Reading a recent paper on economic trade unions in Europe it mentions that BMW was reluctant to ‘take control’ in those early days of its ownership of the Rover Group because of ‘perceived cultural threat’ by Rover employees. In other words, the softly softly approach was considered to be the best way to show respect to Rover Group employees at all levels and reinforce an intention to work with them rather than “impose German management and working practises, which would be viewed as insulting.” Reference to this can be found in Carver, Seale and Youngson’s (2015) book mentioned in my earlier post.

      To quote from the book: at the time of the takeover, “Like the wine [i.e. an analogy relating to not mixing two bottles of different vintage wine together] BMW and Rover were two strong and distinctive brands and they needed to be treated with the same respect.”

      • Fair comments on John Towers. He is much maligned these days, but I read the motoring press – Car Magazine mostly – and the internal newsletter Torque, and he made a very important contribution to Rover Group in those years. I think he also did what he could at the time to convince Honda to up their stake to a controlling interest.

  3. To be fair Paul, this website was around long before MGR’s demise. As far as tears being shed for Rover, not really, it would’ve been parked as a brand whilst it had credibility. Ready to be used again if needs be in the future. Right now it is still tainted by mismanagement and is a toxic brand.

    Towers had management skills, and was the right man for the job whilst Rover Group were under BAe. However BMW should’ve pushed its influence from day one and replaced him. He certainly was not suitable as owner (neither were any of the P4)

    As for wrong owner, perhaps, but then would we have had the likes of the 75 – arguably the best car to have come from Rover since the P6.

    LR, MG and MINI was the way to go. Sadly one of the three didn’t survive and one of others produces butt ugly cars. At least Land Rover (along with Jaguar) produces good cars, is well managed and profitable

  4. Enjoyed the book “The End of the Road” by Chris Brady and Andrew Lorenz on the death of Rover.Gives a good view of that period.

    They would seem to suggest that BMW should have took a grip earlier on and that BP placed too much faith in the Rover management.

    They also imply that the Rover brand had become heavily tarnished through the BMC/BLMC?BL etc days and had lost its credibility with the buying public.Its true that the mainstream British car industry had become the source of much derision with its perception of poor management,bolshie unions and chronically bad cars(some of which were not as bad as the critics would have us believe – I owned a few in my time) and seemed to be an easy on-going target for negative press no matter what steps they took to improve things.

  5. How would Wolfgang Reitzle’s strategy have worked had it been implemented earlier?

    Would it have essentially entailed Rover being canned in favor of an early-90s equivalent of the MG Z-Cars as a stop-gap, prior to MINI taking over the small/medium car segments and MG being positioned as a larger sports car marque?

    Did not know about the Metro/Ka joint venture project with Ford, though guess it partly explains why Ford were allegedly interested in using the early K-Series engines to replace their CVH engines.

    It would have also opened up the possibility that the next Metro / mk1 Ka would have been powered by either K-Series or even an direct-injection 3-cylinder Orbital 2-stroke engine.

    Perhaps the original intention was for the Ka to remain a 3-door-only model while the next Metro replacement would be a larger 3/5-door version positioned between the Ka and the mk4 Fiesta, since the Brazilian versions of the Ford Ka were almost as big as the old mk4 Fiesta from 2008.

  6. Every Manufacturer has one goal in life and that is to make MONEY, Passion has long since been kicked out and Accountants rule the roost. Although there is much talk of “we need these Millions for ever more costly sustainability” Share Holders want their investment and more, Then demand even higher profits for the following years.

    There has been talk of “If Ford took the reins”, To most they appear to be on the ball with marketing and product placement, However over the years they are not the success as many would think, Their products need to be heavily discounted for sale, meaning it has to be a cheap product with suspect long term reliability and read any Motoring analysis on Ford and many will say, They should be the Most successful and richest of the Motoring World.. but there has been countless times of “Record Losses”, Did they do a good job of Jaguar/Landy? looks like TATA are on the right track, and yet relatively inexperienced company compared to Ford, Even Volvo appears to be doing well.

    BA did a good job of asset stripping whilst promoting Rover to a higher level than perhaps it was, It certainly got BMW’s notice and perhaps if BA were healthy who knows if they could have made it self supporting, However heavily relying on Honda was for me their biggest downfall, Before Rover knew it most of their range was over dependant on Honda with impossible sustainability due to the many Licences Honda imposed on them, along with the dictatorship of where to sell to them, There was some goodness to come out of this arrangement but it does appear to be a claustrophobic and costly Marriage.

    BMW is heavily influenced by Share Holders and accountants that even if Rover did work for them, England is expensive compared to developing countries, (not many BMs actually come from Germany) so why keep building in The UK? I somehow predict it inevitable BINI will end up outside The UK, I hope I’m wrong.

    If Mr Pischetsrieder had marched in guns blazing with a sure model plan based on existing 3/5 series models (converted to FWD) and ditching as much Honda as possible, maybe just maybe it could have been different? However not sure the workforce would have took this lying down with the possibility of “Ze Germans are taking over” attitude which I think is what He was afraid of, hence the softly approach for the 1st number of years, Even now sense of pride and animosity surrounds Foreign ownership of Rolls Royce.

    BMW charge highly for their products offering very little equipment for the money, but extensive option lists, yet many are prepared to pay for this supposed Image, I cant help thinking Rover would have a downtrodden stripped cheaper last generation BM if Mr Reitzle had to play ball, would this have been more of an insult than what actually happened?

    So who would have been the best owners of Rover? VW ? a clashing with Audi, or something to fit between Skoda-and The No direction SEAT or slightly above VW?, Mercedes? well Quality has been slipping since it caught the Chrysler virus which it acquired around this time, The French Company’s? who are struggling with Big Cars.. Fiat? just as many problems as The French with producing Big Cars and can you imagine the Quality/ Reliability?? GM? have you seen what happened to SAAB? Perhaps Mazda could have been a better owner? However they were part owned by Ford at that time, Or Subaru ? perhaps too small and partly owned by Toyota which would clash with Lexus? However Hyundai were on the rise, possibly this could have been The Master allowing Rover to be The Upmarket BMW or Mercedes Rival it should be? Alas we will never know.

    Good Essay But Sadly there are too many what ifs and no happy ending.

  7. The Reitzle strategy is interesting

    With MINI, it certainly reflects what BMW have done subsequently 20 years later, though not with the original R50 model which was just a small hatch. The UKL platform is now shared with smaller BMWs which must make it more profitable.

    The L322 Range Rover was a superb effort and showed the future direct of more road orientated Land Rover products

    Not sure about how MG would fit into this. Did he plan MG versions of the Z3/Z4 or a separate range of sports cars?

  8. Rover was neutered by the overpriced and confusing second generation 200 and 400. They’d gone back to repeating the mistakes of the seventies, making cars that were too big for one sector and too small for the other. Also the death of the 100 due to safety legislation left the company with a huge gap in the market that the Metro filled very successfully for 14 years.
    I think Pischetrieder was right. The 200 and 400 should have been ditched by the end of the nineties and Longbridge turned over to producing BMW 3 series, and Cowley and Solihull left to produce the Mini replacement, the 75 and Land Rover. I’m sure Longbridge would have still been around now producing what still is a highly aspirational car and probably employing 8000 staff, rather than the handful at MG now.

  9. I suspect that the BMW takeover was never going to work as long as BMW had reservations about the Rover / Land Rover cars competing with their own range of cars. I cannot believe how stubbornly short sighted this strategy was. Without platform and drivetrain sharing, a practice that knows no borders these days, i cannot possibly imagine what they expected from Rover to achieve alone.
    On the other hand, VW group did not afraid to share almost everything within VW, Audi, Seat and Scoda names, and the successful results over the years proved that they were right.

    • I have never understood that either. What did it matter if the ranges overlapped? The profits would all end up in the same place, wouldn’t they? To me it just seemed like a BMW ego trip.

  10. So why didn’t BMW turn over Longbridge to producing BMW 3 series, a hugely successful product? By the mid nineties, Longbridge was a highly productive factory and the old issues were long dead. I wonder if they were worried that Germans wouldn’t buy a 3 series made in Britain due to memories of British Leyland cars from the past.

    • You could be right Glenn. The idea of BMW building some 3 series models at Longbridge did cross my mind back in those days. Perhaps a re-worked Rover badged version of the 3 series either? Maybe that’s going too far!

      • As mentioned above BM had no reason to build any of its products here as they were already built/assembled in very cheap countries (though just building one model here would help customer perception? possibly Hence The BINI?.) As the Book “End of the road” quite rightly states Rover was loosing money exporting due to the strength of the Pound However BM were raking it in the other way around exporting back to Blighty.. which Sadly is possibly why they all decided we don’t need Longbridge or Rover.

        • I can remember at the time of BMW trying to hive off Rover that Auto Express had a story that I believe also appeared in the Telegraph, that VW were seriously considering to buy Longbridge and build Golf’s there.

          • Must admit I always thought Longbridge and the Rover marque should have gone to VW, who would have spun off some Audi-ish models from the Golf platform (or even made it the beginning of a grand globa aliance with Honda). Inter-brand competition never worried VW, witness recent pursuit of Alfa.

            BMW had a vision for Mini but they’d never competed in the mid/mass market and at the end of the day it’s a family business and the pockets aren’t that deep.

  11. To be fair, BMW had never purchased another trading car company before Rover Group and therefore had to deal with its inherent problems, some of which went back several decades. As a consequence, BMW had overnight gone from being the producer of approximately 500,000 vehicles a year represented by four distinct model ranges, to one that was producing over 900,000 vehicles made up of 12 distinct model ranges, including Maestro/Montego. BMW’s purchase of the Rolls Royce brand and creating a new product and assembly facility was relatively easy in its demands compared to taking over the Rover Group.

    In the short term there was no hope of sharing component synergies or addressing the need of Rover Cars to create a more distinct product range not reliant on licencing agreements (and paying associated Royalties) and Honda technology. At this stage brand management and damage limitation through not being publicly critical of the “English Patient’s” performance or ‘inadequacies’ was imperative.

    The issue of the brands is interesting, especially when you compare the strategy employed by Volkswagen Group for its four core brands. Product portfolio overlap across brands is not seen as an issue as the view is that if you don’t buy a product from one of these brands the chances are you will buy a product from one of the other Volkswagen Group-owned companies. BMW could have done well to have considered this in respect of Rover, Land Rover and MG.

    Joy Batchelor’s (2001) academic paper from Warwick Business School provides a more interesting perspective which highlights that the problems with the core U.K. brand (Rover) focused more on brand management and product development. Indeed, the focus on developing a range of models to fill the gaping void below the 3 Series would have enabled BMW Group to have enjoyed higher economies of scale in the medium and long term and at the same time not diluted the BMW brand by using the Rover brand in subordinate sectors. Sadly history has potentially shown brand dilution to be the case for BMW as their intentions towards embracing globalisation has seen their BMW-branded product portfolio extend to below the 3 Series. Is it really any more exclusive and desirable than a Volkswagen or Mercedes-Benz? What impact might this have in the long term on the ability to continue to charge the same level of premium prices?

    To directly quote from Joy Batchelor’s (2001) paper: “BMW Group product strategy [for Rover and Land Rover] was always subordinate to the needs of the BMW brand. This conflict between developing a group-wide product strategy and the preservation of the distinctiveness of the BMW brand resulted in over four years of indecision in respect of establishing an integrated product strategy for both BMW and Rover Group. The outcome of this inability to set a coherent product strategy resulted in the new model crisis which emerged at Longbridge in the summer of 1998.”

    “At the heart of the crisis in new model development was the fact that BMW never resolved how it saw the Rover brand fitting in with BMW. Was the Rover brand to be complementary to the BMW brand or was it to be a subordinate brand?”

    “Bernd Pischetsrieder, in breaking his silence over what went wrong with Rover admitted: “I think the strength of the brand is part of the reason of the failure with Rover, because part of the secret was that we [BMW] were always focused on one single kind of product.” He continued, “The total strength of the company was that everyone understood what the BMW brand was. And we possibly didn’t understand how to build another brand with a different value and different content”.”

    Moreover, the excellent book by Carver, Seale and Youngson (2015) titled “British Leyland Motor Corporation 1968 – 2005: The Story from Inside”, highlights the lack of decision made by BMW in respect of prioritising new product programmes for Rover Cars in the most pressing market sectors where Rover Cars had traditionally had a strong success, and the initial resistance of being directly involved in the running of the Rover Group. Both these factors added to the problems of the product and the nurturing of a brand (Rover) that had previously achieved significant success is raising the aspirational value and premium pricing strategy of Rover Cars’ models in the early 1990s.

    Furthermore, BMW was mindful of the Rover brand’s slipping image in the UK market through its increasing reliance on pursuing volume sales, including in the lucrative fleet market, but were not considering that Rover was actually a well liked luxury brand with British heritage in many export markets, where models like the 600 Series were actually nibbling away at sales of the four-cylinder BMW 3 Series, including in BMW’s home market.

    To answer the question posed in the essay, yes, the BMW takeover could have been a good thing for BMW if only they had not had the clash of personalities between Herr Pischetreider and Reitzle, who were not taking a wider view of what the Rover brand could have become if given the right opportunities and commitment. Sadly, the aforementioned issues highlighted, together with a lack of understanding on how to manage negative news appearing in the media, undoubtedly had a negative impact on the ongoing commercial success of Rover Cars and the Rover brand itself; not helped by the press constantly referring to the company (i.e. Rover Cars, Land Rover or Rover Group) as merely “Rover”.

  12. Rover should have really stayed with Honda, a company known for producing quality cars, and whose expertise had helped Rover, and prior to that, Triumph, develop reliable cars. I think what could have happened was Honda would concentrate on the B and C segment, and Rover would have collaborated with Honda in the D segment, and possibly developed a Mini replacement with a Jazz drivetrain. Having owned a Honda engined Rover before, the reliability and refinement were excellent and the Honda derived cars were well liked by owners.

    • So Rover would have gained access to all of Honda’s engineering and quality control expertise. And Honda would have got what? A nicer selection of wood veneers to stick on their dashboards?

      The Rover-Honda partnership was successful in the UK, and the R8 in particular was a great car, but it never seemed like Honda got much out of the deal (I’m not counting the rebadged Discovery that they sold under the Honda name in Japan for a few years).

      • Well, they got a foothold in the UK market and to some extent the European market which they might not otherwise have had. Hondas as Hondas were never going to capture much of the UK market , whereas the Honda developed Rovers did reasonably well for a while in the 80s/90s. The sad thing is that they seem to be fading fast, with dealerships closing , and a lacklustre range of cars with little encouraging news on the horizon

      • Honda were quite happy with the arrangement, and gained a lot of useful experience in developing cars better suited to European tastes.

        They upped their stake in Rover Group to 40% or so.
        Following the BMW sale, Honda in Europe took time to regroup on the back of the shock.

        There was more that this partnership could have delivered, had Rover Group’s ownership been more stable under another non-car maker owner. Not least, Rover Group could hve helped Honda with 4×4 tech.

        Imagine Rover input to cars like the Jazz, early 2000s Accord and late 2000s Odyssey. These are all great cars, and could have been even nicer with Rover Group input.
        I’m a big fan of the 75/ZT, but a car based on later versions of the Accord would have been good too.

        The Domani was already dated in 1994 (it had been launched in 1989 elsewhere), but if that was replaced by something based on the Civic, sales could have improved for the 400.

    • Please stop….Honda did not help Rover or Triumph to “develop reliable cars”. By the time Honda came on the scene, neither of those marques existed as anything other than badges. you have no idea how close the Acclaim was to being badged as an MG!

  13. I personally think Bmw mismanaged Rover and didn’t have a clue about the British institution of Longbridge and what they could achieve with so little cash. The price of Rover’s in the mid to late 90’s and the fact that the Brits who bought most Rover’s were being put off by a German owning it (there was still a little bit of patriotism left back then). Plus the fact that Rover’s were to become boring with very few sporty models to bue developed because of BMW’s sporty model’s. The final straw was the axing of the Rover 100 in 1997 and nothing to replace it with-no wonder The Rover group from 1994 to 2000 was failing and losing cash and sales. It was totally mismanaged and left to wither and die. What was left when Phoenix took it over was an out of date rump of boring cars and a very badly tarnished brand image. If only Honda had bought it in 1994.

    • I’ve not heard of any Rover involvement in the Ka.

      Was there any consideration of using the Honda Jazz as the basis for a new Metro?

      • Nothing concrete

        One was an early-1980s sub-Metro project called HD14 either a version of the Honda City/Jazz or possibly even an up-engined version of what later became the Honda Today, the City/Jazz was almost the same size as the original Metro while the Today was smaller then the Metro.

        The other was a late-1980s Honda-developed Metro replacement called SK3, developed specifically for Rover and would not have had a Honda badged counterpart prior to being cancelled in favour of Project R3.

  14. Also interesting to compare with Daimler-Benz’s failed Chrysler takeover, perhaps there’s a lack of imagination/empathy among some elements within German boardrooms?

    When a company contracts due to poor strategy, those responsible are often able to dig themselves in and survive the longest. On the one hand, Rover needed tough love to flush out those entrenched layers of duffers but Uncle Bernd imagined he was dealing with a bunch of pros. like himself. On the other, (as referenced in the Mini saga) it seems many within BMW refused even to accept Rover into the family, let alone bestow any form of love.

    For many, time has skewed the standing and potential of the Rover brand. Skoda is often referenced as how a dodgy brand can be brought up to par and whatever revisionists may say, Rover never sank that low before BMW worked it’s magic.

    The ’89 200 showed a stylish and well-built Rover could be highly desirable but wider success was limited by the constraints that were the downside of the Honda deal (which worsened with HHR) and a lack of international sales clout. With un-compromised, purpose-designed Rovers, sold worldwide and with the halo of association with BMW, the R30 could have plugged the gap below BMW a decade before the 2-series FWD arrived.

  15. BMW did seem very productive of its technology

    For example, instead of creating a bespoke FWD chassis for the R75, why not let it share the 3 series/5 series platform? It would have been far cheaper and quicker, and shared engineering resource for the much needed supermini and medium cars

    • Hear, hear!
      Never understood why the 75 needed a bespoke platform while it could have used that of the BMW 3- or 5-series (even the outgoing E34’s), fine tuned for comfort rather than for “ultimate driving”.

      Same for the MINI: why not build a full range of compact cars (either Minis, Rovers, MGs or Triumphs) from the same excellent platform in various sizes? As BMW are in fact doing right now.

      Not sure this would have offset sterling’s rise, but it would have helped considerably.

  16. CAR magazine once found that “the only person knowing more about cars than Wolfgang Reitzle is Ferdinand Piëch”.
    Bernd Pischetsrieder was partly living in cloud cuckoo’s land when he wanted to resurrect Austin Healey and Riley.
    What BMW had missed completely was the fact that the guys at AR were quite good at modifying Hondas on a shoestring budget but had largely forgotten how to develop a whole car on their own, even with generous fundings provided. Very reluctantly BMW brohght the 75 development project under their control after they had lost patience with their British partners.

    • The last car BL developed it’s self was Montego….the Montego estate body was by IAD. From that point on, ARG contracted out the large chunks of projects to companies like IAD, MGA, RDS, and Hawtel Whiting.

  17. Now everything went wrong from the start.

    The Rover 200 and 400 should of been launched as 15 and 35 and priced accordingly with there market place. VW Polo and Golf size cars and not from the size above.

    The 600 and 800 should of been swiftly replaced with BMW based products using the E36 and E39 chassis, drive train, four and six cylinder engines for 55 and 75, perhaps an extensive restyle of both cars with new interiors to save both time and money.

  18. Rover was doomed after 2000. They had lost Land Rover and were on their own, producing cars fewer and fewer people wanted. The 75/ ZT undoubtedly was a very good car, but the 25 and 45 were old hat by the time Rover folded. Also the lack of money, and Land Rover being taken over by Ford in 2000, saw Rover unable to enter the SUV and people carrier market, which was growing rapidly in the early noughties.

    • Certainly the Rover name was licensed to prevent them building an SUV, which would probably have left them in a bad state if they had survived, given the proliferation of crossover family cars, however did it also prevent them creating an MPV?

      There is the story on AROnline of the plan to contract Matra to build a Rover Espace…

      (And what would’ve counted as an SUV? The 25 Streetwise was allowed, a small crossover which was ahead of it’s time, would a ruggedised 75 tourer? An Espace-based MPV with cladding? Something that looked like a Freelander but was full time 2WD?)

      • We’ll never know, Rover was doomed, although reviving the MG name for sporting versions of their cars did attract some interest. Also the old issue of unreliability, HGF in K series, probably helped in the company’s downfall. ( Why they never got this sorted on the otherwise excellent K series beats me?).

  19. There was never a direct replacement for the Montego to take on the Mondeo and the Vectra, the 600 was aimed at the 2 litre top of the range versions of these cars and the 400 was too small, so Rover was squeezed out of the then massive D segment. Also the indirect replacement for the Maestro, the 200, was turned into a large, overpriced supermini in 1994 and found itself falling between the B and C segment, while the true supermini, the 100, was killed off by safety legislation in 1997 and was becoming badly outclassed. It was this which started to kill off Rover in the late nineties, the old British Leyland problem of making cars that straddled sectors of the market.
    I think BMW should have started a painful, but ultimately lifesaving cull, of Rover in the late nineties. The 200 and 400 should have been dropped in 1998, when their sales were in nosedive, and resources directed towards the 75, the new Mini and Land Rover. I know possibly this would have meant huge redundancies at Longbridge and Cowley, but it would have meant a smaller, better Rover Group that could still be alive today, making the third generation 75 and a 75 based crossover.

    • But then given the car market these days, in which the D segment is being dropped model by model, might the 75 have been dropped for a crossover, not necessarily 75 based – say a Countryman?

      Maybe selling Land Rover off as it now competes directly with their BMW X range, perhaps to a powerful BRICS based company that wants to pair it with Jaguar?

      And maybe BMW might want to consolidate production in Cowley?

      In effect leaving Rover group as the MINI range?….

    • @ Glenn Aylett:

      The “nose-diving in sales of the Rover 200 and 400” was not down to a lack of selling appeal of this models – both ranges respectively sold over 480,000 examples in approximately four and a half years (4 years for the R3 Rover 200 Series limited to just two bodystyles).

      Instead the “nose-diving in sales” was attributable to a fall in demand caused by the introduction of consumption tax in Japan in 1998, as one of Rover Cars’ key export markets. As a consequence very few cars, particularly 200s and 400s, were exported to Japan in 1999. Moreover, at BMW’s insistence, there had also been a gradual retraction of Rover Cars sales from the lucrative fleet market; something BMW themselves have now visited and are reaping the benefits of with very good effect these days!

      As with the supermini sector, the medium sector was a particular strong sector for the Rover Cars division commercially, so it would have made more sense to have prioritised a suitable replacement model than vacate this sector entirely.

      BMW instead adopted the familiar ‘top-down’ strategy whereby the flagship model, the 800 Series, (and also the smaller 600 Series) were replaced by a single model. This would then have been followed by progressively replacing other models sitting in lower market sectors below it. While I can see the logic of this approach whereby the ‘halo’ status of a new flagship model sprinkles down to raise the profile of the ‘lesser’ models, in reality more money was paid out in royalties to Honda from sales of the HHR Rover 400 Series than for the lower selling 600 Series. Therefore in this instance it would have been better to have focused on replacing the supermini and medium market sector offerings first rather than the 800 Series.

      • As I suggested earlier on this page, the 800 could have easily been replaced with a rebodied and Roverised 5 series, leaving more resources to concentrate on the volume cars lower in the range

        You do wonder if BMW did their homework. Surely they must have realised that a company who’s latest car (the 600) was 90% Honda under the skin, and who had far fewer development engineers than BMW wouldn’t be in a position to successfully design its on range of cars by itself, without some help…

        • BMW weren’t really interested in anything about Rover. The main objective was to acquire the MINI brand and a low-waged, compliant, workforce to build their new sub-BMW product, and a site for the plant to do it. Anything beyond that was a bonus – that’s why BMW were content to walk away from both Rover and Land Rover. They simply had got what they wanted and didn’t need the grief of the rest.

          • Hardly, why would BMW go through all that hassle for the Mini badge (considering the minimal sales the Classic Mini was generating) and elderly Rover group factories, instead of just building a new factory like they did in the US.

        • From what I understand from speaking with former Rover engineers, the opportunity to use current or soon-to-be-discontinued BMW rear-wheel drive platforms was actually welcomed by Rover engineers and senior management, especially to aid in replacing the 800 Series.

          However, having attended a suppliers meeting in November 1995 with my father (whose company supplied specialist purpose machinery to Rover Group and other U.K. vehicle assembly plants), it was clear from a senior Rover manager at this presentation held at the Heritage Motor Centre that “BMW make the best rear-wheel drive cars in the world, and so Rover will make the best front-wheel drive cars in the world.” Clearly the agenda for Rover Cars had already been ‘set in stone’ by its new masters, regardless of the obvious cost and time-related benefits you suggest in your earlier post. A shame…

          • “BMW make the best rear-wheel drive cars in the world, and so Rover will make the best front-wheel drive cars in the world”

            This reminds me of what Donald Stokes (?) was saying about the abolished Rover P8, that he wanted it to be a “Mercedes beater” (sic).

            They never learn, do they?
            Poor old Rover, didn’t deserve such rubbish management.

          • A foolish decision by the BMW bosses if that was the case, with the MINI they did indeed create a world class FWD car (in terms of driving), but ignoring the pragmatic use of RWD platform sharing for the 600 and 800 replacements was daft.

  20. It’s a sad story, Rover were showing so much promise in the early nineties with waiting lists for some of their cars and a very positive press, but by the end of the nineties, market share was falling and BMW was losing patience. It’s not that the 200 and 400 were bad cars, they were refined, well finished and good cars to drive, more that they were overpriced for what they were and were too big for one sector and too small for the other.

    • If Rover had priced them at a slight premium over the mainstream equivalent models as they had with the R8, the 200 & 400 models would have probably sold like hot cakes but they tried to push cars that were to small into the next bracket and subsequently lost sales. Another issue was that the R8 was a car co-designed by Honda & Rover, but the 400 was a Honda design and had looks which did not fit into European tastes. The 400 saloon was such a better looking car shows that Rover designers could make a silk purse out of a pigs ear.

      • Compared to the ugly duckling Domani, it shows the talent that was at hand that they eventually derived the MG ZS from it!

        Rover seemed to be adept at platform work, the R8 spawned the gorgeous Tomcat coupe and the lifestyle estate Tourer (before similar stylish models from Volvo (V40) and Alfa (156).

        • The restyle of the 200 and 400 that became the 25 and 45 sharpened up the design of the cars with four headlamps and handling became better in anticipation of the MG versions. I much prefer the 25 and 45 to the HHR cars and MG variants certainly went well and had a cult following that MG Rover were delighted with. Sadly though, for all I quite liked the look of these cars and they were good cars to drive, the design was ten years old by 2004 and then the cars were compromised by Project Drive and a failure to solve the head gasket problem.

          • I agree with Glenn’s comments. Having owned 3 HHR cars (a 414, 45 & ZS), I enjoyed them all, particularly the ZS. Its handling was the best.

            Surprisingly, although my 1997 414 had elec windows all round, the 45 Olympic S and ZS, although higher spec, didn’t. Luckily I didn’t have any HGF failures and they seemed good value used cars. As documented here, they remained in production longer than planned,though MG Rover did their best with facelifts. Project Drive was damaging though

  21. After reading the essay and the comments, to me it still isn’t clear why BMW bought Rover.
    It would make sence, if they had started component sharing in order to expand their product ranges and grow together. Ford did it with Jaguar, with the added difficulty that there wasn’t much in common between the each other’s products. However, this didn’t happen between Rover and BMW.

    Just for the Mini brand? I am sure they were able to create their own new FWD range and brand with much less fuss and cost. After all, they had their own history with small cars.

    For sentimental reasons? Nah, this doesn’t exist in the corporate world.

    Suddenly, conspiracy theories about tax avoiding and economic results make much more sence than reasons that have to do with automobile construction.

  22. Pischetsrieders biggest error was putting all his bets on the Rover 75 that did not share enough components with BMW. He should have had engineers begin work on a BMW based Triumph TR6 and a Triumph Dolomite. The Rover 75 should have been based on the 3 series. This way had the Triumphs launched successfully, with a new Mini in the pipeline then BMW may have given Pischetsrieder more time even with lacklustre Rover sales. He could then have rapidly expanded Land Rover, Triumph and Mini keeping Rover ticking along with one large saloon. Overtime they might well have then found his Rover strategy start to work, but Pischetsrieder had no insurance plan.

    Reitzle plans would have worked better and putting the 1 series into production in the UK would have bought the rest of the company time.

    As it is I hope BMW realise the potential of Triumph and develop it as the car brand for Mini owners to graduate to.

  23. At the time of buying Rover, BMW made three different three box saloons and needed to diversify, they needed a new brand to compete in the small hatch market because “all BMWs are rear wheel drive”, Mini was the obvious target. The fact they constantly spread the “English patient” story whilst financially crippling Rover with the cost of building BMW-owned plant in the UK (which they still own to this day) – it was clear early on that this was an asset-stripping and financial hatchet job. Spiking the 75 on the day of its launch is all you need to know. It cost SAIC next to nothing to fix the k-series – why didn’t BMW attempt to invest in fixing the k-series? They wanted another reason for Rover to fail. The fact hardly any Rover parts were used in MINI is another clue as to BMWs final intention. Surprise surprise the plant handed over to Phoenix was the one that got no investment – what happened to R30? Any more clues guys?

    What they handed over to Phoenix was an empty shell of a company – it was now Rover who only made a handful of dog-eared cars and one gem with a duff engine – no Mini – no SUVs. I can’t believe anyone believes BMW had any intention of making a go of Rover – don’t forget just before the Rover deal, the likes of Ford were sniffing round BMW – buying Rover dashed any thoughts of BMW takeovers. BMW used the purchase to acquire finance (a noose around Rover’s not BMW’s neck) in order to build loads of ultimately BMW-owned plant, it then asset-stripped and dumped Rover – it’s that simple. We were stitched up – we were robbed.

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