Rover joins car price war with across-the-board cut
MARY FAGAN, Industrial Correspondent
ROVER, the car company owned by British Aerospace, is cutting 7 per cent from list prices of almost all models, providing savings of more than £1,000 in some cases. Rover has, so far, largely avoided the price wars in the car industry, but is the first manufacturer to make such sweeping across-the-board reductions. Companies such as Ford have been offering special deals and discounts on specific models to woo customers, while some manufacturers have increased the basic list prices of their cars.
John Towers, Rover’s managing director, said: ‘Our action reflects a fundamental, long-term approach, not tactical limited discounting on certain models or old stock.’ He said a single clear price reduction would help to remove confusion and uncertainty among buyers. Rover dealers will also be mounting special campaigns to sell current stock.
The cuts come after disappointing sales of new cars in August, which is considered the most important month of the year for car sales. Car bosses have warned that there will be no early end to the recession in the industry, with some citing 1994 as the earliest end to gloom. The consensus is that domestic sales of new cars will not reach last year’s 1.59 million, and there are fears that export sales, which have so far shored up British production, are beginning to flag.
Last week, the Society of Motor Manufacturers and Traders said margins for dealers and manufacturers were already very tight and little scope remained for further price reductions. The Rover cuts could exacerbate the problem of customers waiting to buy cars as they hope for further price falls. Rover, which made a trading loss of £52m last year, has already introduced short-time working at its plant at Longbridge, Birmingham. The company said its price changes were the result of improvements in manufacturing and distribution which had been in the pipeline for some time.
These improvements would mean savings of many millions of pounds for Rover and its dealers, the company said.
The new Rover 800 series has already been priced to take into account these improvements, and is the only range not included in the price changes. Customers taking advantage of the move can save more than £500 on a 1.3 Mini Mayfair Cat and around £500 to £750 on some Metros. Prices of Rover 200 models will fall by around £800, while savings on the 400 range exceed £1,000 in some cases. Savings of about £770 on Maestros and more than £800 on Montegos are also available.