The troubled Austin-Rover Group is set to announce huge losses of £700 million today. Although there has been growing optimism about prospects for the state-owned company, the scale of the losses will startle MPs. The figures follow the Government’s decision to write off some £700 million of group debts to help with a corporate survival plan put forward by new Rover boss Graham Day.
The losses are mainly due to the serious fall in the company’s share of the middle range mass – produced car market. Now reorganised and with better models, the Rover Group is hoping to fight back towards profitability, and, according to Ministers, sales so far this year have been encouraging. The £700 million loss is one of the worst figures reported by the car giant. Last month Mr Day said ” the figures for the losses in 1986 will be high, but we will do better this year as the reconstruction begins to bite.”