I know it sounds a little bit sad, but I remember exactly where I was when I heard the news. I was on a break at work, in the rest room, buying a can from the vending machine. In the background the television was on – it was the 6.00pm news on BBC1, 31 January 1994, and I heard the words over the dramatic title music: ‘BMW has bought Rover for £800m.’
I remember it vividly and I also recall my reaction. I was shocked, upset, felt betrayed and saw it as the end of the British car industry – ironic, I guess, as I had recently ended a long line of British cars and was then currently driving a French saloon. I may even have let out a dejected, ‘oh bollocks!’
Can of Coke in hand, I sat down on the dusty seat in front of the 22in Toshiba and took in the details. Bernd Pischetsrieder was interviewed in a green space in London, along with senior Rover executives. All were bullish for the future beyond British Aerospace. Rover would bring market share and front- and four-wheel drive expertise to the arrangement, while BMW would bring money, global presence and development resources to our home firm. It all sounded great, of course, even if it meant that ownership would be leaving the UK.
Where did that leave Honda, though? Yes, that future relationship was over and the Japanese were seen to lose face but, in the coming weeks, a deal was struck that at least ensured that the Joint Venture Anglo-Japanese cars would continue into the future. Who’d have thought at the time that the upcoming 400 would continue for a further decade in lightly revised form. For BMW, the merger was great news – it wanted to expand in order to prosper in the after-effects of the 1990s recession and growth by engulfing Rover seemed to make sense at the time.
For British Aerospace, the deal was manna from heaven. It had bought Rover in 1988 for £150m, invested very little in it during its five-year stewardship, asset-stripped Cowley, cancelled model programmes and forced management to lean increasingly heavily on Honda. Five years later – almost to the day – it pocketed £800m for the company. Not bad… Mind you, during this time and despite all that, Rover was doing very well indeed at flattering to deceive – producing what looked to be a highly appealing model range going into the 1990s.
Appealing enough to catch BMW’s corporate eye, anyway.
At the time of the deal, Volker Doppelfeld, BMW’s Chief Financial Officer, said ‘Just to develop and build a new model in BMW’s existing range would have cost more than £800m paid for taking over Rover.’ A bargain all round, then. BMW was particularly interested in both ends of the Rover range – the off-roaders and the small cars. With Rover, BMW could fight the mass-market manufacturers head-on.
Industry watchers were surprised by the move – it had always been assumed that Rover and Honda would move closer together and, given time, for better or worse, this may have been the case. Honda wanted that. Rover wanted that. However, the British company’s overlords weren’t in it for the long game – and sold out.
Initially, from an outsider’s perspective, it looked like the deal could work. The combination of Rover’s design talent and BMW’s engineering nous should have been unbeatable. Finance and a light managerial touch from Munich should have seen the Brits just get on and create world-beating cars. That did, in a way, happen – during the six-year period with the German company in charge, the Rover 75 was launched (and torpedoed by the Pischetsrieder when the wraps came off at the Birmingham Motor Show – below) and both the MINI and Range Rover were in the final stages of development.
The Freelander, MGF and 200/400 were already in the pipeline when BMW arrived on the scene. Many worthwhile improvements were also made across the range during this time, such as the brilliant Land Rover Discovery Series II and its excellent TD5 engine.
However, during 1999 and on the back of falling sales of the Rover range, BMW’s controlling Quandt family bowed to pressure from the financial markets. It forced the board to downgrade its Rover ambitions and accepted the consequent resignation of Bernd Pischetsrieder. Months later, it sold Land Rover to Ford and the rest of the range to the Phoenix Four, while keeping MINI for itself.
Another chapter was over – and the saga was winding down.
A lot has been written here about BMW’s controversial stewardship of Rover – the sales losses and euro/sterling inequality may have caused Rover pain (it had moved 40 per cent in sterling’s favour between 1994 and 2000), but equally it meant mega-profits on all of those BMWs sold here. A lot was riding on BMW’s planned strategic alliance with Chrysler for Rover – so, when Mercedes-Benz swooped in to form the equally ill-fated DaimlerChrysler, it must have felt like it really was stuck with Rover, not quite knowing quite what to do with it. BMW’s supplier cost and logistics base in the UK was also proving troublesome and costly for Munich.
The other problem was that the long-term plan for Rover, which would see the company offering the MINI, R30 hatch (and derivatives), 75, MG sports cars and Land Rovers could have worked given more time, money and resources. Unfortunately, these product plans had been too long coming and were way too far from completion – and, for the financial markets, that was never going to wash. Game over…
So was I right to have been shocked and dismayed at the news back in 1994 – TWENTY years ago? It would seem so. BMW failed point blank to capitalise on this wonderful opportunity and we were left with a legacy of failure in Birmingham that the UK motor industry, thanks to an emergent JLR, is only now really emerging from. That said, I’m not a conspiracy theorist who believes BMW bought Rover to steal its 4×4 technology and the MINI, as so many here are – I know people within the company who still care deeply about British cars – it’s just how it outwardly appears to be.
Do I also blame BMW for the death of Rover? Not at all – I think it was a misguided, and ultimately well-intentioned, guardian in this sorry soap opera. Equally, I don’t blame British Aerospace – as opportunist and money-grabbing as it was at the time. Once again, we need to look at the Government for selling Rover to a convenient port in a storm in 1988 and not sticking with it, just at the point it was about to turn the corner. Instead of ditching Rover, maybe it should have been nurturing a deeper partnership with Honda. There was certainly plenty of mutual respect at the time and Honda clearly wanted partnership, not ownership.
Instead, the Government pulled the plug and we were left with the end game, even if we didn’t know it at the time – as I said in 1994, and as I still feel today… ‘oh bollocks’ to it all.
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.