Blog : The year it went pear-shaped

Carole Nash Classic Insurance Specialists

Ian Nicholls

fishtrousers

One of the joys of being able to trawl through the news archives of our favourite car manufacturer is being able to pinpoint when the course of history irrevocably changed.

In the year 2000, we were told by those who were much more intelligent than us British car enthusiasts, that the Rover brand was dead, and had been deceased since way before BMW had stumped up £800 million to take it off British Aerospace’s hands in early 1994.

However, they didn’t tell us that in 1994 – in fact, a glance at the newspaper articles reveals exactly the opposite, that for £800 million BMW had got themselves a bargain and that Rover had been undervalued. Rover had continued to go from strength to strength, with Land Rover excelling all expectations. Although the volume car business was still loss-making, the company was arguably Europe’s most efficient car producer. It was hailed by politicians of all sides as an example of successful British industry.

The unions had won a pacesetting pay rise, and a new model development programme meant Rover had created 3000 jobs in a little more than two years. Bernd Pischetsrieder, the BMW Chairman, had said he intended to take Rover up- market, producing more exclusive models and reducing dependency on the domestic market.

John Towers

John Towers (above), Rover’s then-Chief Executive, would not talk about which products and plans were on the drawing board, other than to say: 
’In a world that sells very good ordinary cars we have got to create extraordinary cars.’ 
The media claimed that the long-term strategy was to reduce Rover’s dependency on the UK, where about four out of every five of its cars were sold. That would mean strengthening the company’s position in traditionally weak European markets.

In January 1995, Towers declared: ‘Rover Group has continued its export-led success during 1994 despite continuing economic difficulties in a number of markets and unrelenting competitive pressures.’

Rover was the pride of British manufacturing and had successfully pushed its Anglo-Japanese cars into continental Europe. A Rover in 1995 was that something a little different from your average Eurobox and, perhaps, appealed to the same kind of people who bought Saabs and Volvos. It was this sales appeal that attracted BMW.

John Towers said Rover’s sales were increasing in BMW strongholds such as Austria, Germany and Switzerland, where Rover sold 13,000 cars in 1994 in a market of 3.5 million. Rover’s output rose 16 per cent in 1994 to 478,000 vehicles, its best performance since 1989. Demand in mainland Europe rose 16 per cent, against only 3 per cent in Britain. The Independent newspaper wrote: ‘There is no question that the future of the group, not just Land Rover, is more secure than for many years.’

This was clearly not a dead brand. So how and why did it all go wrong?

The MGF and MGF VVC at its launch in 1995

In March 1995, Rover tried to buy Unipart for £300 million. They were rejected. The same month the MGF was announced. The media expected the new MG sports car to re-enter the lucrative American market. This was, perhaps, the moment when BMW began to mis-manage its Rover brand, because the MGF was never sold Stateside since it threatened sales of its parent company’s Z3, which was manufactured in South Carolina. Sales were going begging and, otherwise, the MGF could have sold twice as many units per year.

The HHR Rover 400 was announced at the end of March 1995 and, although it has received a lot of criticism on this site, it did sell very well, particularly in 1996 and 1997. In early April 1995, John Towers announced that the Rover Group had made £83m before interest and tax in 1994, its best profit for many years and an increase of £45m over 1993. Yet, by September 1995, Rover appeared to be in trouble.

BMW had tried to run its UK subsidiary at arm’s length for 18 months. Now BMW had decided that this was a mistake and installed a new Rover Chairman, Dr Wolfgang Reitzle, a hands-on manager and reputedly a hard man. Suddenly, from being one of Europe’s best performers in 1994, Rover was now one of the worst.

The latest figures showed Rover took only 10.22 per cent of the key month of August 1995, down from 10.91 per cent in 1994. Its share of the market for the first eight months of 1995 was 11.03 per cent, compared with 12.22 per cent for the same period in 1994.
John Towers, Rover’s Chief Executive, had said the decline in UK sales was because the company wanted to reduce its dependence on the home market and expand in mainland Europe.

However, total European sales in 1994 had also fallen, by 13 per cent to 190,000 models.
Rover said the sales decline was due to the ending of Maestro and Montego production –  in fact, most of the range was suffering. One dealer said: ‘Take the Rover 400… It is a smaller car being positioned in a higher bracket because Rover has raised the specifications. So we now have the Rover hatchback being positioned against the Ford Mondeo.

‘In times like these dealers are finding it hard to shift the product. The Rover range lacks excitement when it is pitched against some of the competition.’

autowp.ru_rover_200_5-door_6

In October 1995, the R3 third generation Rover 200 (above) was launched. John Towers, said: ‘This is our strongest presence in the medium sector. Within 12 months we have transformed our range.’

Rover, despite its investments in marques, faced a tough task. The company’s UK market share had fallen from 12.4 per cent to 11.3 per cent in the first nine months of 1995, and the company had done little better in continental Europe. But, again like the new HHR Rover 400, the R3 200 sold well. In 1997, Longbridge produced 343,157 cars, its best total since the 1960s, and 263,551 were the R3 and HHR models.

In December John Towers gave an interview to the New York Times, a newspaper whose readers were unable to buy a Rover car. John Towers conceded that Rover’s new hard line on discounting and the steady erosion of its European market share that this policy had caused, had raised concerns. Rover’s European car sales in the first 10 months of 1995 slumped 8.6 per cent from a year earlier, cutting its market share to just 3.0 per cent. In the face of such numbers, John Towers said, ‘There is a temptation to say, “Oh my God, go ahead and sell some at a discount”.’

That, then, was 1995, the year it began to go pear-shaped for Rover. Perhaps the star performer was the Rover 600 saloon, 61,413 were manufactured that year. By the end of April 1996 John Towers had quit and BMW had appointed in his place Walter Hasselkus.

In my analysis of the BMW years, there was no mention in the media of the fact that BMW had to pay royalties to Honda for each Rover sold with Honda DNA in its make up – probably the BMW shareholders were ignorant of this as well. In 1996, production of the heavily Honda-based Rover 600 slumped to 43,701.

Some would argue that BMW were reluctant to advertise the car because of the royalty payments it incurred. After 1995, BMW made the mistake of airing its dirty laundry in public, which only served to discredit the Rover brand in the eyes of its potential customers. In terms of sales, the Rover Group’s best year was still ahead, 1997, but BMW’s panic driven reaction to the strength of Sterling from 1998 onwards helped seal the fate of the Rover brand.

74 Comments

  1. Yes, like the multiplicity of so many UK sell offs, the hugely asset rich Rover Group was sold dirt cheap. Th\at we as a Nation allowed this to take place is one of the reasons why the Nation is nowhere doing as well as those we entrust ti its well being would have you believe. Yes, sold off dirt cheap little or no regard for the longer term like so many other UK assets. Spiv-like dirt cheap by a Government with an agenda which had precious little regard for the long term future of UK commerce, industry and other important economic aspects of the nation’s economy.

    Thatcher and her team of worst forms of Tories, surgically removed or undermined much of the UK’s Industrial and infrastructure lifeblood… which shafted the Unions and associated problems at the same time. How very convenient. I strongly suspect that was a prime consideration covertly high on the de-Industrialisation of the UK Tory agenda.

    I write the above as a life long voter with largely conservative values.

    What really puzzles me to this day is that so many of my fellow countrymen and women believed those imbalanced economic decisions, cuts, closures, cheap sell-offs and other longer term harmful measures were the correct thing to do.

    Praise be that appears not to be the case with my fellow Brits now as the Referendum result would indicate. The people have sent a clear message to those we entrust our Nation’s well being and I hope that change of form is maintained. They in their cushioned against reality jobs-for-life environments need to be told and reminded frequently of the longer term harm the harsher side effects and other harmful aspects of the decisions and measures they make does to the rest of us. Cheap sell offs of National aspects, particularly into foreign ownership and alien control is not the way to go. Correction. On second thoughts, those assets are gone! GO is precisely the operative word…when it suits them, not us, they will not act in our best interests and go.

    TATA for now. More worryingly, human nature being what it is, could simply be a matter of time.

    • It’s a fantasyland world you live in if you think that after the failure of the Allegro that British Leyland could ever have found its way back to being a volume car manufacturer, because with the failure of the Allegro to gain any traction in the growing European market meant that it lost its European Dealer network which meant it could never hope to sell and make cars in sufficient volume to compete with the other major European, Japanese and US manufacturers.

      What you forget is that nobody wanted BL and so it was sold to British Aerospace with only thing of real value they had, which was the Land and rather than going to Spiv’s the cash they got from that was needed to restructure their business post-cold war including some major investments in airbus and some less successful investments in regional aircraft.

      If you want to look for someone to blame, look at those who failed to take the hard actions necessary in 1974, and instead accepted the Ryder plan with its absurd assumption that all would be well once Europe comes to its senses and buys Allegro, Marina, Maxi and Princess in such volumes we have 30% of the European market.

    • Sorry, Thatcher is in no way to blame, look at how well BL were doing in 1979, and compare that to how it was in 1990.. however, then look at how well BMC/BL were doing in 1974 compared to 1979, then 1997 – 2013.. there’s a definite pattern, the enemy of manufacturing is not the Tories, it’s the unions and labour

  2. A very interesting article & a change in BLARG circles from explaining what went went wrong with BLMC & MG Rover &, for that matter, the relative recovery under Messrs Edwardes & Day.

    Yes Mr Thatcher did, as a whole, give up on British industry stating that the future of the UK’s economic sense depended on growing its service sector rather than the industrial one. However one often fails to remember that between 1975 until the sale of the Rover Group to BAe, governments invested over £2bn in British Leyland & apart from the first four years, all of this came u dear Mrs Thatcher’s rule. Furthermore it was Cabinet colleagues who tried to discourage her from doing this rather than the other way round.

    One could argue that the rot set in when the company was sold for an arguably criminal amount to BAe who clearly demonstrated that they were as averse to investing a fair amount in it as they were from clearly paying a fair price in the first place. A lot of this is masked by the success of the second series 200 & to be fair, their hands were tied by Honda in terms of a lack of autonomy being granted when developing the 600 & HH-R. (Rover were particularly underwhelmed when they had the dull Honda Domani imposed upon them as a basis for developing the latter.) Further analysis of the company under BAe reveals a “what could have been” had decent levels of investment been made. Yes the Rover 400 was developed under somewhat limited circumstances but the company was in an enviable position of being able to develop a successful car in R3 for a song. This should have enabled them to develop a successor to the Metro which would have been a better long term bet that R6 which, when all said & done, had run its course by the time it became the 100. (The dash alone was over ten years old by this time let alone the bodyshell design which, by the standards of the mid 90s, could only be described as fragile.)

    So for BMW to state that they had an exciting product plan ahead was something of an exaggeration. Yes the MGF & the 200 weren’t going to disappoint but other than the 75 & the P38 Range Rover, there was very little in the pipeline. Just as the crossover was emerging as the must have model in a volume car manufacturer’s product development plan in the MG Rover days, Rover under BMW could have had a niche model in a premium MPV (rear facing seats were a popular option on the Volvo options list remember). As well as failing to develop the MG brand by not selling the F in the US, BMW failed to make MG models from their saloon car range. This is understandable in a way as at the time, Austin Rover were still being ridiculed for using their MG brand on their bread & butter cars & nobody was to know that such a move could be seen as something more than badge engineering as it had been on just about every example of a saloon MG in history unlike the relative success in the MG Rover era.

    To give BMW its dues, whilst it bottled it with the 45, & arguably the 600 replacement, the 55 perhaps as it saw the car as too much of a threat to its own 3 series, it did bring the 75 to the market & had things turned out differently, the MINI & the 35 which looked like it was going to be a very good car. (I refrain from using the term “world beater” as the phrase has been overused in the history of BL ARG.)

    Had Tony Blair’s government loaned BMW the money it needed to kit out Longbridge for MINI production, it may well have remained a player in the UK car industry rather than being seen by the man on the street as a company who bought Rover merely for its four wheel drive expertise.

  3. I remember the day in 1994 that the sale was announced. I knew nothing about it until I got into work that morning and was told by others. I remember to this day the sick feeling in my stomach. Rover was never the same again, and my career plan and a hoped for job for life went out the window.

  4. Problem for Rover was that BMW were not 100% behind it – it was fishfingers dreamy idea of old British motoring. Instead of investing in a joint model programme to bring costs down and generate greater profits, BMW overpriced models so they went up against cars in a bigger segement therefore damaging sales. They also blocked what they thought would be cars that would damage BMW sales from competing on the market, and brought in retro idealised ideas of British Cars that were to soft to take them away from their core market.

    If you look at the plans put in place later in the BMW era, the new 55 would have shared engines, and had the investment gone ahead from Blair’s government Rover may have still been here if it had been marketed properly. To say that it was all based on the goverments state aid being blocked by EU is mad, as Renault and Peugeot had been given aid by the French government (who just ignored the EU) and Nissan, Toyota and Honda had been given grants for their investments in UK manufacturing.

    You have to look at the British government at the time, Labour had not long been in power and GB had planned to raid all of the UK silver to try and clear our debt pile. Investing in Rover, a company which was losing money, had been given large funds from the government in the past and was owned by a foreign firm was probably seen as a dangerous and precarious move.

    However I still say the rot started once BAE took ownership. Their lack of investment meant although Rover were looking a good prospect, it was really only just a heartbeat away from life support. That is probably why Honda never actually bid for it.

    • Perhaps a good business ploy from Honda – under someone else’s ownership they could maintain royalty payments on any Honda derived product – which included the soon-to-be-released-new R3 200 and the HH-R 400 – vehicles which were just ramping up for brand new production and so would be a steady income stream for a whole vehicle generation (which ended up being a decade)?

    • That is not really how it happened.

      BMW was a relatively small and lean company at the time of the takeover so simply did not have the managers to put into Rover to manage it, this meant they were allowed to go their own way for too long and this included rejecting BMW offer to use the outgoing 5 series platform as a basis for a new large Rover (still would have made it by far the best Rover ever built).

      Instead they were allowed to go their own way and after going up a few unaffordable avenues ended up with the 75 (whilst it was not a FWD 3 Series they had instead effectively spent billions building what they could have had if they had just engineered a FWD 3 Series reskin) and pitching themselves into the market against the “cooking” versions of the 3 Series and threatening the core business that was we have to remember pouring billions in investment and writing off 300 million a year in losses at Rover.

      • You describe BMW as a lean company!
        BMW’s management structure had 26 levels of hierarchy from the shop floor to the board at the time, contrasting with Rover which had just 7. Rover had by this time adopted Honda’s production system.
        Far from leaving Rover to its own devices they forced the ‘fat’ back into the company, increasing the none value added content. The increase in the work force was mandated by BMW to replicate their model of production. The very methods that had existed in BL in the 1970’s!

  5. Another great British business down the pan when it went down in 2005. Germans didn’t understand it whatsoever and added their huge expenses on to Rover accounts, making Rover look like a heavy burden on cash demand. I personally thought Rover was doing really well up to the 1993 German takeover. From 1989 up to 1993, Rover could do no wrong and anything they touched or launched turned to gold. If only Honda had bought Rover-we would have a strong company still around. Look at every British nationalised company ever sold off and they ve eventually been split up, lost market share and hived off in parts which get smaller and smaller. We have paid the ultimate price because we have nothing left and look at Royal Mail now-going the same way unfortunately. Too late now. Rip MgRover.

    • If Honda had taken them over they might’ve used them as a badge for European premium ‘Acura’ models. We may still have the Accord, albeit as a Rover. Might even have brought some of their smaller models over, the likes of the ‘Fit’ as a Metro replacement, the S600 as an MG Midget.

      • Honda opened their greenfield plant at Swindon in 1985, so why would Honda wish to concurrently own an outdated unit such as Rover, Honda Swindon produce 120,000 cars per annum along with engines for export to other plants, an estimated productivity of 40 cars per annum per employee or better, does anyone have productivity figures for Rover?

        • Productivity figures can be very misleading since Honda would have many backoffice functions in Japan which would not appear in those figures. Similarly, if Rover had sold its Swindon presswork operations the productivity figures would improve but it would lose significant added value.

        • Comparing eggs with eggs as Swindon is only a manufacturing site and therefore excludes Engineering and Sales and Marketing then Rover productivity was 55 cars per man in 1990. The Rover 200 final assembly lineman Longbridge ran at 60 units per hour on 2 shifts and moved ton3 shifts by 1991

      • As the Rover 600 was nothing more than an Accord in drag, I doubt that this car would be around today if it had stayed that way. Look at what happened to the Accord itself in the market.
        Remember the CAR title at the 600’s announcement, criticising exactly that with the line “The only things Rover added to the Accord” and showing the chrome grille and number plate plinth?
        The 600 was to the Accord what the X-Type was to the Mondeo, and they both failed deservedly.

        • I thought the C pillar was redesigned to make it look more Roverish. A bit more than just the chrome.

          I was in my Honda dealership last week and was shown photos of the the new Accord that they are going to begin selling in the UK again. My 11 year old Accord is the best car I’ve owned.

        • The usual anti-Rover BS from CAR. The 600 was a new shell and very good looking, owing very little to the fussy and dull Accord. (A Rover insider told me that when the 600 was revealed, the Accord stylist was given a severe telling off for making it so dull) The X-type and the Mondeo – having owned both, I will return to that another day.

    • I know we Brits cant help blaming the evil Germans for everything (even though I’ve always found them an absolutely charming nation), but it is simply wrong to say everything with Rover was fine until BMW took control. Under BMW Rover enjoyed a level of investment the British motor industry had never seen before. Some of it is still visible – The MINI brand, the Hams Hall engine plant and the never used MINI/R30 assembly hall at Longbridge. BMW’s only mistake was to trust the inept British Management to spend their money wisely. The same team that used BMW’s £1bn dowry to stuff their pensions in the Pheonix era. These are the idiots who marketed a Honda Civic with a chrome Grill as a Mondeo competitor and the same idiots who bastardised an old model Honda Civic with a chrome grill and let it compete directly with the new car, even launching it in the same year. The Rover 75 took 5 years to bring to the market even with a fully engineered platform being provided by BMW on day 1. Only last minute intervention by a BMW hit squad allowed the car to ever go on sale. If BMW had properly managed Rover from the beginning, getting rid of Towers and his team of incompetent con-men Rover may still be here today.

      • As far as I was aware, Longbridge never got knitted out for MINI assembly as BMW went to the government for a £200m loan & they would only give them £150m. That was of no use so they sold up & used the money to kit out the former Pressed Steel Fisher factory at Cowley instead.
        Regarding John Towers, he was gone within two years of BMW taking over but was clearly highly regarded by the workforce given the hero’s welcome he received when he went back through the gates four years later.

  6. I feel Alchemy Partners were culpable in the downfall of Rover, because they broached the concept of BMW walking away from Rover, and gave BMW their escape route, although having made the running, Phoenix took the prize.
    In 1998 Rover lost £647 million which was £1301 per vehicle. But I suspect of this total, £400 million was invested in Cowley to produce the Rover 75.The more money BMW invested in a year, the more cars Rover had to sell to balance the books, and BMW just panicked.

    • I’m afraid that argument is invalid. You have confused revenue deficits i.e. losses , with capital expenditure and conflated the two

    • Remember that under German accounting rules, investment is not amortized over such a long period compared to UK accounting standards. One crucial new model that would have appeared in these loss figures would have been the new Land Rover Discovery Series II, which carried over very little from its predecessor, and the new Td5 diesel engine.

      It was in 1998 that sales collapsed in the crucial Japan market. This was partly due to the introduction of a consumption tax which made Rover Cars’ models appear expensive when added onto the basic list price.

  7. The Domani was a curious curved ball from Honda although maybe they were fed up with how Rover always made a better job of things, eg 600 compared to Accord. BMW’s internal politics did for Rover although arguably without them we would not still have Cowley and Hams Hall. The Tories did a lot of damage to UK manufacturing but some of this was indirect in the way that the UK financial system is organised and the lack of good company managers whilst arguably without them we would not have Honda, Nissan and Toyota here. The BAe takeover was possibly done as a favour to Tory mates since they didn’t have much of a clue what to do with Rover. There was an SUV – Oden which morphed into Freelander. One of the important issues was how Rover continued to pitch cars into competition with models of fundamentally different classes/sizes and then try to change tack.

  8. Bmw in the early 90 s were losing European market share and Rover were increasing theirs. Bmw were amazed, when they took over at how much Rover could do with so little cash. Rover shone like a star and their cars were quite reliable thanks to the Honda effect. They were also posting a small profit and readying the Rover 200 and Mgf for launch in 1995. I’ve never been a fan of Bmw but I do understand their cars are well built and of good quality. It’s the image I could never get past-which shouts out I’ve made it and am successful. This and the fact I don’t like buying foreign cars if I can buy British instead. I was reading that Rover were selling nearly 300 000 cars in the uk at the time, which was an incredible amount, when Bmw are struggling to sell 100 000 today.

    • I wouldn’t be too sure about the quality of BMW products. A lot of people I’ve spoken to who have owned them have had all sorts of issues.
      I remember being on a training course a few years ago where the trainer arrived late and flustered. His opening words were “don’t ever let anyone convince you that BMW s are reliable cars” having just had his new Z4 break down.

      My daughter’s partner couldn’t wait to get rid of his 1 Series with dashboard warning lights illuminating like a Christmas tree on an almost monthly basis.

  9. The problem under BMW was Rover started to overcharge for their products and had a confused range. The second generation 400 in particular seemed to be marketed at both the buyers of Ford Escorts and Mondeos and fell between two stools like the Princess did in the seventies, it was too expensive for the Escort buyers and too small for the Mondeo market. Also the 200 became overpriced for what it was, a large supermini, but in 1.4 form was tempting to buyers who wanted brisk performance, good refinement and the sort of interior you’d never find in a Fiesta. Yet the lack of a replacement for the 100, with the 200 partly taking up the slack, began to hit Rover.

  10. The HHR and R3 did not emulate the desirability of the R8 series.

    The seats were unsupportive in the new cars and the trim design dowdy and unappealing, compared with the outgoing R8’s such as the SEI it is easy to see how the new cars lacked showroom appeal.

    • The 45 addressed the seat issue by having the 75’s seats. Unfortunately though both cars got seats which were even less supportive than the original 400’s for the 2004 model year IIRC.

  11. An interesting article although there seems to be a bit of confusing inter-changeability in respect of how you refer to the “Rover” name as either a brand or as the trading title of the cars division (i.e. Rover Cars) or the whole company (i.e. Rover Group).

    The ‘death of Rover’ could be read as either the Rover Group, Rover Cars or the Rover brand itself used on a range of cars.

    In many ways, some of the issues you refer to in respect of Rover Cars and the impact volume sales had on the Rover brand itself, are now very much in evidence with the BMW Group. Look at the plethora of different models they offer ranging from a medium sized hatchback to an increased presence in the lease market and discounted fleet market. Is a BMW such an exclusive and aspirational product as it was back in the 1990s?

    Discuss please…

    • The last company I worked with replaced Vectras with 3 series so not surprisingly when I went to my current company, the car park was full of Bee Emms.
      I’m amazed that there is still room in the market for both the Mondeo & the Insignia. Goodness knows how the Rover 75 would fare if it were a contemporary car today.

      • The Mondeo and Insignia survive on fleet discounts. But for company car schemes, such as salary sacrifice which are based on resale value at the end and taxed on emissions, the Germans have it all sown up such that it is cheaper to business lease a 320d than a Mondeo/Insignia.

        The news is that Insignia sales are actually dropping. There could be a number of reasons:
        – The well documented death throes of the mainstream D segment. Not just in UK/Europe, but also in the USA, where “mid size sedans” are for the first time outsold by crossover SUVs. (see http://www.thetruthaboutcars.com/2016/08/july-makes-official-americans-buy-suvscrossovers-cars/ ) where the Insignia (now built in Canada) is sold as the Buick Regal
        – While it is still a handsome car, in terms of vehicle generations at 8 years old it is getting long in the tooth. By comparison, both the Vectra B (mk1) and C (mk2) were on sale for 6. Spy shots of the next generation model are available.
        – The Mondeo, it’s biggest competitor, is fairly new and a good looking car.

        The Corsa is also struggling, and between the 2 models some wags are pointing the finger at Brexit, however between the recently launched Viva taking sales of base models, and the fact that the current model is a reskin of the old one, I’d say that most people aren’t bothered with it.

  12. Bet BMW wish they had kept Land Rover now considering that Land Rover now make more cars than Rover did under the final year of BAE ownership.

    • At the rate at which Land Rover were losing vast amounts of cash on their abysmal warranty record, BMW were very glad to be shot of Solihull and it’s problems. Aside from which, they never wanted Land Rover anyway. BMW’s long-term interest lay in acquiring a brand – MINI- to market below BMW, with a low-cost, compliant, workforce.

        • BMW definitely did want Land Rover – I was there at the time – but I equally feel that some of BMW’s management wanted to torpedo Rover Group as a significant competitor. The BMW engine fitment to the P38a was widely seen as the way BMW got to learn about Land Rover. Also, at that time the R50/separate Mini brand didn’t exist.

          • BMW have lost out. They needed more than MINI. Their strategy to acquire Rover group and the associated brands was, in my opinion, really good.

            The MINI brand does not fulfil the objectives which were the driver for the acquisition of Rover – a mainstream brand for FWD and smaller cars.

            MINI is a silly niche. BMW departed from their strategy of working on and investing in Rover because there were internal disagreements and loss of confidence at GF level, ultimately driven by personal ambitions – Pietchesreider and co. V Reitzle and co.

            It does make me laugh the ongoing nonsense which I hear about BMW buying Land Rover for their “technology”.

            BMW have an engineering and development department which employs thousands and thousands. Land Rover’s are not and have never been cutting edge and they did not need to purchase the brand to “learn” Land Rover’s secrets. They could have bought a couple, laughed a lot at the panel gaps and shocking general fit and finish, then had a look around to learn these “magic secrets” as opposed to buying the lot. To me, it shows how bright they were because look at Land Rover now as a brand after a bit of investment, much of which was from BMW – it is flying. BMW lost out due to their odd knee jerk disposal strategy.

            It is quite rare for a German company to panic and do something outside the core strategy as BMW did with selling Rover. It was a huge mistake and BMW have hugely diluted their own brand and image in so many different cars wearing the BMW roundel.

            It is a crying shame and everyone, including for the most part BMW is a loser.

            It was so near to turning round. I am sure that if there was not this management spat, with Reitzle on the phone quite a lot with the Quandts undermining what was essentially a sound plan, going through its rock bottom, we would all be excited a celebrating a range of quality Rover cars now.

        • I think that idea is overplayed, BMW were never trying to create a genuine mudplugger.
          They already had 4WD versions of their saloons, so it was hardly difficult to create the first X5

        • Land Rover’s ‘four wheel drive expertise’ was never of any interest to BMW. It was ancient. The only technology that BMW ‘took’ from Land Rover was the hill descent….and that wasn’t Land Rover’s….they brought it in!

          • Yeah, it was actually developed by the Germans in the first place (Bosch) if I remember correctly.

  13. Why did BMW buy Rover anyway? Did someone from the EU lean on them? What did they hope to get from it that they were unable to get on their own?

        • Interesting, if that’s the case, I wonder if there’s a link between Issigonis family and the arrival of two troublesome (for us at least) German warships Goeben & Emden at Constantinople at the start of WW1. The timings certainly seem to be in the right area. Just imagine, if the royal navy hadn’t monumentally cocked up the pursuit, the mini might never have existed and millions of present day secretaries would be Cooper-less (and not doing their makeup at 65mph in the fast lane).
          As to Rover and the assets – I strongly suspect that the company had the British disease – counting liabilities as assets, from decades before, so needing loans to replace old machinery or dies which they didn’t get (remember the story of workers shimming up equipment with fag papers to get them within some semblance of “true”).
          All Thatcher did was turn off life support for a whole bunch of moribund corpses, which if they’d been forced at practically gunpoint (that’s what it would have taken)to update 20 years earlier would have been in much better condition economically.
          Personally I think Rover died somewhere around 80-85 but in the nature of things no one noticed – after that it was just treading water without enough successes to keep it viable but not quite enough disasters to kill it..

  14. As I’ve said in the past, it might have been better, when BMW abandoned Rover, for the company to concentrate on Land Rover and the Rover 75, two premium products with a decent future and export potential, and to axe the 25 and 45. I know it would have meant job losses at Longbridge, but surely concentrating on Rover as a brand making premium saloons and SUVs would have been better in the long term.
    I could see the writing was on the wall in 2003 when the useless Indian built City Rover was launched and Project Drive cheapened the brand to stave off the inevitable.

    • The problem with that argument is in the process of abandoning Rover, BMW sold Land Rover to Ford rather than to throw it in for the tenner that the Phoenix Consortium paid for MG Rover.

  15. How many Aronline fans are driving around in bmws? How many people bang on about how Margaret Thatcher ruined UK industry yet own an audi?

    • There is the slight mitigating factor that there’s nothing to buy that’s British in that sector, so it’s a bit unfair to complain about people buying BMW or Audi or for that matter Kia, Hyundai, Toyota, Honda or anyone else.
      What little we’ve got left of a British car industry has gone bust so many times they’ve got their own coffee mug at the receivers.
      The industry can be revived but it means creating a niche and sensible products within that niche. And it will have to make a loss the first few years because Made in Britain has currently all the market appeal of leper colony package holidays – we have used up all the goodwill and the only way of generating more is good products at unreasonable (for us) profits..
      But it’ll never happen because the British flat cap mentality can’t manage to think 40 years into the future, 40 minutes is hard enough..

      • Actually, in world markets, ‘Made in England’ really helps sales. This is particularly true of Aston Martin, Bentley, and Rolls Royce.

      • With all due respect, as I usually enjoy your posts/comments, I would suggest that the current Jag range is a great competitor to the German execs.

        If we look holistically at what was BL, the British car industry is doing brilliantly well – we have MINI representing a lot of what Austin used to – small to mid size hatchbacks and crossovers, we have MG with a sporting-budget hatch and crossover, Jag with a range of executive saloons, a new SUV (which is where the market is) and gorgeous sports car, and Land Rover who are going from stregth to strength riding the crossover/SUV wave.

        For those who have “made it”, Rolls Royce is still in a rare, globally recognised, niche of it’s own in terms of luxury, Bentley are offering similar products that are starting to look ever so slightly the wrong side of vulgar on the knife edge that on which luxury products must tread (see Burberry for a brand that slipped), but still a respected marque globally, and Aston Martin makes elegant sports cars, the type of expensive sports car that everybody loves – a rare thing, when sports cars are usually designed to showcase the owner and so are often despised by others.

        And if you want “Made In Britain” a little more mainstream, you have the Opel/Vauxhall Astra, Honda Civic, CRV, Nissan Qashqai and Toyota Avensis (albeit the latter may succumb to the demise of the saloon D segment).

        Yes, a common thread for most of these products are that they are not UK owned. But in a globalised world, does this really matter? Perhaps it says more for the UK schools of senior management, chasing short term gains, than it does the UK engineering and design skillsets (which are respected in F1 – most teams have a UK base, even in US Indycar the chassis were UK designed).

        • Hmm, I must have missed the memo re half the known world ceding their car manufacturers to the UK, oh wait, there wasn’t one.
          Rolls Royce is owned by the Germans, Toyota by the Japanese last I looked. Need I go on? Assembling CKD kits does not a independent UK car industry make, neither is the new Rolls Royce a British car, most of its bits come out of the company parts bin, which is no bad thing, not to mention the current “thing” is the ugliest wheeled vehicle I have ever seen, it’s the Zoidberg of luxury cars.
          TVR has gone down more times than a Clinton intern and the last I heard it was Russian owned.. It’s probably changed a few times since then.
          If Nissan or others abandon their facilities post brexit we’d have a golden opportunity to rebuild a British high volume manufacturer or manufacturers but only if it’s done right and with good niche competitive products, two stroke Diesel/petrol electric hybrids, panels such as bonnet & roof solar panelled. And please no howling about how two stroke anything is unclean and the spawn of Satan, current car diesels are as polluting in real life as they were 15 years ago and you might as well call anything with a GDI engine a cancer wagon because of its horrible levels of particulates, not to mention it’s habit of coking up valves like a Morris Minor with a jammed choke, ah progress. Imagine a two stroke tuned pipe eco boom style (non GDI) petrol engine with an electric blower below 2500rpm and a normal turbo or supercharger above that, same power and torque for 60% the displacement & materials used, so it’s more economic/ecological to build; imagine through the road hybrid in addition to an engine mounted electric or air hybrid. Let’s have fun and have a look at a condensing closed circuit steam turbine, fuelled by biodiesel..
          But it won’t happen, because there isn’t the will to do it, the money to do it, or sadly the native expertise to do it, because most of our home grown engineers & designers take one look at the actual British industry, sigh, and go work for someone foreign. Made in Britain for me means a British company making a product from start to end, that’ll hopefully sell worldwide – Rolls Royce and the others you mention do not apply. I can think of one and that’s Morgan and they’re hardly mass market.

          • The engineering and the cars themselves are spot on and thrive under foreign ownership.

            Does this not point the finger at UK ownership / senior management, who are pressured by shareholders into the next big short term profit? Seems to be a thread around many otherwise successful companies – regardless of whether be they car manufacturers or high street shops – shareholders get the bounty of the boom, but it is the company and employees that suffer when the bust hits.

        • Will I agree with most of what you say there except for the MG bit. They have nothing to do with UK manufacturing and I predict the badge will have disappeared within a few years.

          • …..that said, I was watching Dave the other night and saw an advert for a family going out to a pizza restaurant. They appeared to be driving one of those new MG badged Suvs. That pizza looked really good.

  16. I remember reading that Berndt Pischtreider was shocked when he was told that the MGF had not been engineered to comply with US legislation and that there was nothing that could be done to make it comply. That was why it wasn’t sold in the US. I think the same nearly happened with the Freelander, but he insisted that it be engineered for sale in the US and that happened.

  17. To me there’s a certain amount of misty eyed nostalgia about the Rover group pre BMW, which produced miniscule numbers of cars (when compared with its global volume rivals) and was heavily reliant on Honda, who with their own factory in Swindon had little need for Rover anymore.

    I think BMW overestimated the engineering capabilities of Rover, perhaps not realising how much the volume cars division relied on Honda…

  18. @ Will M, I totally agree, what remains of the British car industry is doing extremely well and making cars people want to buy. The industry might be foreign owned, but even in the seventies, there was only British Leyland left and that was losing market share all the time, and going back to the fifties, when almost every car on the road was British, Ford and Vauxhall were American owned and had a fair chunk of the market.
    Surely workers at Cowley, or Plant Oxford, are far happier now working in decent conditions and earning good wages making a product people want to buy than being stuck in a strike ridden dump run by incompetent managers in a company whose future was uncertain.

  19. I do think Rover’s quality picked up hugely in the nineties under both BAE and BMW. I regularly see two Rover 600s in use as daily drivers and you don’t have to look far to see immaculate Rover 75s. In 1996, how many seventies SD1s would you see on the road, or come to think of it even C reg final generation cars, they all seemed to die quite young due to rust and awful quality.

    • The 600’s downfall was that it was just too good.

      It wasn’t in BMW’s best interests to proactively market the 600. It was a thread to the company’s own 3 series & royalties on each one sold to Honda weren’t exactly negligible. Hardly surprising that they introduced a turbo diesel & fast model as they used their own engines so probably cut the amount that they had to shell out.

  20. @ Phil Simpson, I also recall from reading Top Gear when BMW sold Rover in 2000 that the 75 had a much better press reaction than the new 5 series. It was maybe BMW were scared that Rover could start to outsell them in the premium sector and tried to downplay the car.
    However, the big drain on BMW’s finances, the less than thrilling second generation 200 and 400 and lack of a supermini after 1997( the original Mini was barely alive) probably persuaded BMW that 75 and new Mini apart, the company wasn’t worth it.

    • BMW clearly didn’t rate Rover as a brand as they sold the 75 to the Phoenix 4 & the marque to Ford rather than keeping both & relaunching the brand as a single model company as it had been in the past, notwithstanding the overlap that the P5 had with Ps4&6 respectively.

    • With all respect to the 75, the only ‘real’ Rover since the SD1 ended production IMO, I cannot see that it could have been a threat to the E39 5-series, a car which is still enormously respected by consumers, journalists and engineers alike. Even if the 75 had eaten a little into 520i and 523i/525i sales, which I consider fairly unlikely, the 528i/530i, 530d and the V8s, all the way up to the mighty M5, would have remained wholly untouched by anything from Longbridge.

      Having longed for another Rover ever since my magnificent 1973 P6 3500S, which ultimately died of terminal rust, I’m now on my third and fourth BMWs – both E39s. The 535i is just what I’d imagine a 1990s P6B could have been like, and utterly reliable. The 520i Touring (facelift M54 model) has been both a joy and an utter pain in the arse – thankfully more the former than the latter since its engine replacement.

  21. All this smacks of “Fog in Channel, Europe isolated”. The car division was pretty much doomed when they became dependant on Honda for most of its cars. If it had been a one off situation for one car they might have survived, but the weekness of being dependant on others for basic engineering underlines what bad shape the car division was in.
    Plus the company was starved for capital for decades, and BMW was not going to threaten its core products by spending any more than it had to on a potential internal rival. As it was, the popular and profitable 6 series was not able to be replaced due to the capital drain by Rover.
    Finally exports- where were they?
    An ‘executive’ car company lives or dies by exporting to other markets outside the E.U. If you couldn’t sell in decent numbers in the U.S. at that time you were not likely to survive without a rich protector like Alfa and Fiat. BWM was in good shape,but couldn’t afford to indulge Rover to the extent Fiat could with Alfa.
    Finally with exports- I don’t know what image Rover actually had in the EU, but in traditional markets like Australia is was laughably poor. Quality on par with early Hyundai and a campy joke called the 75- much as if Cadillac relaunched itself in Britain with a Astra with giant fins, painted pink.
    You actually begin to suspect BMW was playing a practical joke on Britain…

    • I would go as far as to say that The Rover Motor Company as it were in pre 1967 were already facing uncertain times when they sold out to BMC or whatever that was called. Though unfortunately for Rover and similar manufacturers, they had little choice because of financial uncertainty’s and the fact that BMC were the only major player to offer perceived rock solid support. Alas, with Lyons stern interest only in Jaguar; Rover, Triumph were overlooked and decent new models underfunded. I’m sure that with required investment, the Rover P7 could have been engineered to be a world beating car with crashworthiness to go with that, something the P6 was already famous for. Imagine having a British built car to buy today with Volvo like reputation for safety and Lexus style reliability?
      BMC and BL were the custodians for what was to be their own fate and what they are remembered for worse of all. By simply acquiring way to many brands, factories, workforces, overheads and unions to go with this. Also of course all this happening only a few short years before the fuel crisis in the early 70’s which affected luxury marques like Rolls Royce who seemed to be doing ok independently prior to this. The new emissions regulations required in the US states affected most off the world car manufacturers and heavy industry, and I honestly don’t think mismanaged company’s like BMC/BL would have had in place reasonable contingency funds for such unforeseen world circumstances.
      As for today the only low volume manufacturer (bearing in mind Rover once was a low volume manufacturer in the 60’s) that is wholly British and doing very well today is The Morgan Motor Company, and surely staying an independent and well managed car firm has helped them be what they are today. Good job they turned down that take over bid from Rover back in the day! A further note is Aston Martin CEO Andy Palmer and boss of JCB are themselves not worried at all by Brexit, and perhaps the reason that Vauxhall is not doing so well here at the moment like Ford, is that they foolishly have put prices up on their cars! Why!? Morgan or Aston have not done so.

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