By David Benson
Motor giant Rover last night announced record losses of more than £892 million in 1986. Most of it includes restructuring costs, such as the £539 million written off when Leyland truck and bus division was taken over by the Dutch company D A F.
It means the taxpayer has injected nearly £3 billion into the ailing, state-owned company. The most disturbing news for the company came from its Austin Rover car division. According to the preliminary figures for last year, its losses soared to £166.6 million from £19.3 million in 1985.
Land-Rover made a profit of £3.3 million – the same as in 1985. Group chairman Graham Day put on a brave face as he announced the figures. He said: “I believe the actions taken in 1986 are such that the year will be seen as a turning point. Against the background of substantial losses in 1986, the first quarter of 1987 has shown encouraging improvement.”
He pointed out that exports were up 17 per cent and that operating losses for Austin Rover and Land-Rover for the first quarter of 1987 were “less than half the £30 million incurred in the comparable period in 1986.” But production and the volume of sales for 1986 were down according to the figures. The number of vehicles made fell from 557,000 to 476,000, while the number sold fell from 542,000 to 494,000.
Latest figures show the Rover Group’s share of the UK market for last month was 15.77 per cent, compared with 16.55 per cent for April 1986. But despite the gloom. Rover can see some light al the end of the tunnel. Its bus and truck problems are behind it and its new Rover Sterling is in great demand in America.
In March, Austin Rover achieved its best monthly export sales for seven years. The company can also take heart from its continuing successful collaboration with Honda of Japan.