Marriage of convenience?
When the Phoenix consortium walked away with the prize of MG Rover, having snatched it from under the nose of Jon Moulton and Kevin Morley at Alchemy at the very last moment, none of their directors thought for a minute that they would be having an easy ride in the future. John Towers knew the score, and returning to Longbridge, as he did in May 2000, no doubt he would have been pondering just how much the company had changed during the intervening years since the last time he worked there. Still, there would not be too much time to ponder the immediate past – but only to look forwards and plan for the future.
And as he had been very public about Phoenix’s plans for Rover, that future needed to be one that involved Rover remaining a volume producer…
Indeed, when laid out, the product range on sale at the time consisted of the newly launched Rover 75, and the older 45/25 ranges – both lightly facelifted versions of models that had been around for about five years. There was the evergreen Mini of course, but that was on the run-down (it went out of production six months after) and the MGF roadster, but neither was in the running to affect the John Towers plan of keeping Rover a volume manufacturer. So, looking at the then current line-up, the absolute priority was to replace the 25 and 45. However, MG Rover did not inherit any of the research and development carried out on the BMW financed Rover 55 model (codename R30), and that meant that they would be effectively starting from scratch. Given this scenario of an ageing product line, a fixed cash reserve and little in the way of research and development facilities (BMW sold the Gaydon facility to Ford), it looked like a very tall order.
The conclusion was reached very quickly: collaboration was the order of the day. Very quickly, John Towers and his directors began putting the feelers out for companies that could be interested in taking a stake in MG Rover in return for assistance with the replacement for the 25/45 ranges. Any potential suitors would be offered Longbridge as a production site – and the promise of closer links in the future.
Collaboration needed… India to the rescue
However appealing this plan may have been to Towers, there were fundamental flaws in it, and the manufactures that were approached in the first instance rebuffed MG Rover. Persistence and lateral thinking were the order of the day at MG Rover, and soon, manufacturers in less obvious markets were sought out and then approached. The emerging markets of China and India were two – and discussions with China Brilliance Industrial Holdings and TATA were the results. Ultimately, the promising plans cooked up with CBIH would prove fruitless, but TATA’s moved forward very quickly indeed.
In Europe, TATA was seen as the manufacturer of slightly agricultural off-roaders and pick-up trucks, and if there was a innate hint of 1980s Mercedes-Benz in TATA’s styling, put it down to TATA once having commercial links with the German company. However, there was a great deal more to the company than cumbersome off-roaders. The parent company TELCO (Tata Engineering and Locomotive Co.) had been around since 1945, and during the intervening years, had become India’s largest industrial company (having interests in iron and steel, heavy engineering, railway locomotives and heavy commercial vehicles). Yet, there was still a real ambition within the company to branch out into car manufacture. In 1987, this finally began to happen, with the launch of the (commercial-based) TATA estate. The Sierra, Sumo and Safari SUVs followed, although like the original ’87 estate model, each continued to borrow heavily from the commercial vehicle range.
During this fertile period in TATA’s history, India’s car market had been opened up; and the international players had all been keen to move into this most promising of new markets. The quaint idea (mainly held in Europe) that the Indians built nothing but old British cast-offs (Hindustan Ambassador and Contessa, anyone?) was an outdated one, thanks to the wave of new (and non-Indian) cars entering the market on the sub-continent.
TATA – the family company owned by Ratan Tata, wanted a piece of this action – and felt that what the Indians really needed was an entirely Indian car designed specifically with them in mind. In September 1995, Ratan Tata announced that TATA would be producing India’s first completely indigenous car: ‘We’ll have a car with the Zen’s size, the Ambassador’s internal dimensions, the price of a Maruti 800 and with the running cost of diesel.” Starting from scratch was a huge undertaking to take, but thanks to the styling talents of IDEA in Italy, a five-door hatchback was soon drawn-up.
In December 1998 the results of this hard work were launched in India, the new car being known as the Indica. It was only fitting that the country’s first entirely homemade effort was so named, and given that it was the ideal package for Indians, it came as no surprise that it immediately became a best seller. Within eighteen months, TATA had sold 100,000 Indicas, but it had not been a trouble free time. The rushed development (and the fact that it was TATA’s first true car) of the Indica had resulted in an enormous amount of reliability and quality issues – and this badly affected sales. TATA fought hard to regain their position of strength, and ironed out the problems quickly, even going to the extent of recalling huge numbers of the original Indica, replacing parts like shock absorbers, and this helped to restore faith in the product. Just as quickly, TATA re-launched the car: the better-built and specified Indica V2 being the result. Launched in February 2001, the V2 soon became the best selling car in its class in India. Despite its success in its home market, TATA continued to lose money on it – and that created the ambition within TATA to export it.
Indica for Europe
When MG Rover was presented with a proposal to sell the Indica V2, it recognised that it could have much potential as a new small Rover in the UK and Europe – especially considering the fact that their dealers had been crying out for a replacement for the Metro/100 since it had been killed off in 1997. Although, the Rover 25 had been repositioned to fight in the supermini market, and the entry-level model had been brought down to a 1.1-litre version of the K-Series, buyers did not identify with it as a town car in quite the same way they did the Metro/100. And that was the thing – the Metro/100 may have had many, many faults towards the end of its life, but it still had the advantage of being perfectly sized for those looking for a city car for one. The result was sadly inevitable – when the Rover 100 died, buyers did not turn to the 200 – and the drop in sales for the company between 1997 and 1999 almost coincided with the loss of the company’s small car.
With the Indica, the company saw the opportunity to recreate the Metro, without dipping into vital financial resources. The fact that it was contemporary and stylish was a bonus…
A deal with TATA was quickly reached, and essentially it boiled down to this:
· MG Rover would adjust the styling without changing any of the body pressings. This would allow bumpers and other body addenda to be re-styled by Peter Stevens‘ design team.
· MG Rover would have a degree of freedom to adjust the chassis settings in order to tune the Indica to be more suitable for the UK and Europe’s roads.
· Economics dictated that the car would need to be built in India, and then reverse-imported.
A quick programme to adjust the car better to suit the demands of European buyers was instigated (under the codename RD110), and the marketing people knuckled down to the unenviable task of deciding just what they were going to call the new car. According to one engineer, it didn’t go anywhere near far enough: “As far as we could see, the problem with RD110 lay in its low quality interior, and apalling gearchange. And when we presented management with a programme to improve both areas, we were completely ignored. We felt the RD110 wasn’t being taken seriously, and during its original start-up, no British engineers were assigned to Pune – only management made that visit.”
Marketing – good and bad…
Naming it was always going to be difficult, because on one hand, it was always going to be difficult to justify adding the Rover nameplate to a car that was produced so far away from the UK. In the past, Austin Rover may have had similar misgivings over the branding of the Triumph Acclaim and the first generation Rover 200, but they bit the bullet anyway, and success soon followed. The difficulty, however, with the TATA produced car was that it was replacing the Metro/100, and although in latter years it was a fully paid up member of the Rover family, it was still very much known as a ‘Metro” rather than a ‘Rover” and was therefore something of a model in its own right.
In deciding a marketing strategy for the new car, it was clear that they needed to associate the car with the rest of the Rover range, but also to give it a clear identity of its own. It was for that reason, the Rover 15 name was quite rightly overlooked – besides which, the future products of the company looked increasingly likely to be given names rather than numbers.
The title that the marketing people came up with, CityRover, was actually a very clever solution to the problem. It managed to remain clearly a Rover, but also evoked the clarity of purpose that worked so well for Land Rover and Range Rover in the past (i.e., you needed a Land Rover to cross the land, so why not a CityRover to drive in the city?) Perfect really. One former company manager summed up the choice of name perfectly by saying, ‘…I think it’s a good way of slightly distancing the car from UK-built Rovers, while also positioning it quite effectively.”
Engineering-wise, there was little that the company could change given the limited budget and time that they had to play with, but despite this, the CityRover emerged as a little bit more than a topped-and-tailed Indica. Changes were made to the 1405cc single cam Peugeot derived engine (mainly to help it exceed the latest EU emissions regulations), and a new mounting was devised in order to insulate passengers from potential vibration and the effects of engine shake. The wheel size was changed from 13 to 14-inch diameter, and the gearbox final drive ratio was lowered slightly to compensate for the change. The suspension settings were altered by increasing front and rear spring rates, whilst lowering the ride height by 20mm. Also the gearing of the steering was raised to a sporty 2.8 turns from lock to lock… engineers talked of a car that rolled a lot less than the original and it would offer qualities that a few rivals would match.
Born in auspicious circumstances
Certainly, the dealers felt it would sell – as it is the car that they have been clamouring for since the demise of the Rover 100 back in 1997. The economics of the exercise should have been be extremely favourable, given its low build and almost zero start-up costs. Given this, MG Rover should have turned a handsome profit on every CityRover sold (stories of the car costing between £900 and £2000 to build indicated as much), and although it was never considered enough to turn around the company’s fortunes (how could it have been with a projected output of 30-40,000 per annum), it should have helped arrest mounting losses.
September 16th 2003 saw the CityRover enter production and MG Rover’s chief executive Kevin Howe was in Pune in India to mark the occasion. It was Dr. V Sumantran that handed over the first CityRover to Howe at the ceremonial roll-out of the new car. Howe stated: “In order to effectively meet the market requirements of the United Kingdom, we felt the need to introduce a small car which would target the city car sector”.
The only question mark that hung over the CityRover’s launch was a familiar one: Would the quality be good enough and was it really what customers wanted. A senior motoring journalist at the launch related: ‘I quite like the CityRover, and reckon its packaging is excellent. In base form, it’s not bad value in terms of space and power either. But the plastic mouldings really are sub-standard. Still, I think it could work for MGR, and it’ll be a fine piece of opportunism if it does.” In initial viewings of the car at the Longbridge factory, paint finish looked exemplary and exterior build quality acceptable. If one looked closely, one could find rough edges, and the interior’s sub-standard plastics and a general lack of “class” counted against it.
If MG Rover actually managed to encourage customers into its showrooms, and get them into the CityRover for a test drive, it should have been OK. Because in driving terms, it wasn’t a complete duffer – handling was incisive, and the steering delivers a goodly amount of road feel. Ride quality was also on the right side of acceptable on urban blacktop – the CityRover’s natural habitat. On broken motorway surfaces, however, tyre noise can be an issue, but it is certainly not bad enough to be noted as a criticism. The thing that would have impressed those that take that all-important test drive, was the CityRover’s pace… it was really quite quick, and blessed with acceleration that is not shaded by larger and more expensive cars: up to 60mph it felt as quick as a Ford Focus 1.6, and that was impressive, when one considers that the Daewoo Matiz and Ford Ka were price rivals to the CityRover.
Importantly, the reliability should also have been there… the Indica needed to be reliable in order to succeed in its home market, and with the V2, TATA managed to iron out all the bugs from the original model. This bode well for MG Rover, which had taken some flak in the past on the matter of product reliability…
However, like all good BMC>Rover product launches, the CityRover’s was marred by controversy. In this case, questions over the company’s finances had been raised by the Financial press, and although management have worked hard to counter the bad publicity, it was enough to plant the seeds of doubt in many potential owners’ minds. There is also the issue of the purchase price: given the public perception that the “Phoenix 4” have acted in a greedy way, MGR seemed to have scored a home-goal in pricing the CityRover as ambitiously as it did. There was no doubt that this situation would have been rapidly reversed with a price cut
The press reviews, however, were mixed. AUTOCAR magazine was pleasantly surprised by it: “…It is a budget car from a manufacturer strapped for cash, and it aims to offer simple, cheap, Rover-badged motoring. And you know what? Judged by those simple criteria, CityRover is a long way from being the joke you might expect.” The magazine went on to praise the CityRover, “For starters, it’s very spacious. Four adults can easily sit in comfort and rear leg- and headroom shame that of a Ford Ka. The trim on this Sprite model is basic cloth and it has a split folding rear seat. Other than that, it’s bare: winders for the windows, and a few poorly placed buttons on the dash.”
Performance was also praised, “There’s an 84bhp four-cylinder Peugeot-derived effort out front and it only has to lump 1040kg. A pretty dreadful gearchange does its best to spoil any real driver enjoyment, but the fact remains that on performance alone, Rover has singularly failed to meet its overall market expectations: it is class leading.” Summing-up the CityRover, however, it was difficult to escape the lack of interior quality, and it was not only AUTOCAR that commented on this matter: “So where does that leave the CityRover? Well, it’s a spacious, brisk runabout with an immaculate paintfinish but a woeful interior. It’s cheap but not quite cheap enough, and it’s up against some much more desirable machinery. But given the available resources, it really isn’t a bad effort. If peppy performance and a Brit-badge matter more than show-off interiors, then it will do the job nicely. It also answers a question asked on the cover of this magazine back in July. ‘Are they mad?’ we asked of MG-Rover’s decision to sell the CityRover back then. At the time I thought they were; having driven it I don’t think they are.”
The first full road tests painted a slightly bleaker picture for the CityRover – and it again came back to two factors: quality and price. MGR had set the CityRover a competitive headline price for the entry level car, but in doing so, omitted much in the way of equipment. Also, the introduction of Fiat’s Car of the Year winning Panda moved the budget car game on. CAR magazine summed this up succinctly when it compared the CityRover with the Panda: “Sure, there are good reasons for the CityRover being the way it is, with its built-in limitations. But it’s hard to present a compelling case for actually buying one, especially when it costs more than the Panda – and indeed the Skoda Fabia and Hyundai Getz. To stand a chance in this packed marketplace it has to be significantly cheaper or better than all of them. It’s not. It’s roomy, it has more power than the Fiat and it rides better too. But it doesn’t add up to a package that’s anything like as pleasing as the Panda.”
CAR magazine went on: “The 2004 European Car of the Year winner shows how the game has moved on. It’s safe, comfortable, interesting inside and out, and – crucially – cheap. Think of it as a more versatile Smart and you’re close. The CityRover is not a bad car, it’s just the Panda is a generation ahead.”
A slow death
In the end, whether the CityRover was any good or not didn’t matter at all. The company did not appear to take its marketing seriously at all – there was no media blitz to accompany its launch on the market place, and when it did start to appear in showrooms, it was under conditions of complete stealth. There were no dealer launches for prospective customers, no press launch to speak of, and when car magazines started requesting cars to drive, they would be met by long waiting times from Longbridge. It was almost as if the company was embarassed about the product.
This was never more evident than when the CityRover was considered for testing on BBC’s highly successful Top Gear television programme. Producers for the programme approached MG Rover and asked if the programme could have a car for testing – to their surprise, the request was politely turned down. Of course, there were reasons for MG Rover refusing a car (short notice being the main one), but as far as producers of Top Gear were concerned, they were being refused the loan of a press car. In the end, Top Gear tested the car in highly comedic circumstances, and gave it a panning… and from that moment on, any hope the CityRover had of being treated seriously by the press or buyers had now blown out of the door. In short, its launch was ruined, and it became something of a laughing stock.
An almost complete lack of advertising didn’t help, either… and in the end, sales targets were spectacularly missed.
As it was, the company knew that the CityRover had quickly become damaged goods, and realised that improvements were going to be needed. A troubleshooting team was sent out to Pune to work with TATA on an improved version of the car, and a review of pricing was soon underway.
As sales continued at an alarmingly slow rate, a revised version was quickly knocked up, and a scheduled launch date iof May 2005 was pencilled in. Although less than 6000 CityRovers were sold in its first year of production, MG Rover intended to fix the car’s faults and then modestly relaunch it. However, these Mk2 cars were never officially launched, as the CityRover became a victim of the MG Rover meltdown of April 2005.
However, there was a twist in the tale… although MG Rover had gone into liquidation in April 2005, a consignment of 1200 Mk2 CityRovers had been built and were shipped out to the UK in anticipation of its launch. When they arrived in the UK, no one initially wanted to take responsibility for them, but they were taken in by the company’s administrators, PricewaterhouseCoopers.
So, if nothing else, the CityRover can claim to hold the dubious honour of being one of the world’s only cars to be introduced after the company that built it had gone to the wall…
Was the CityRover a missed opportunity for MG Rover? Absolutely. Hindsight is a wonderful thing, but the CityRover ended up failing because MG Rover didn’t know how to handle it. Its initial launch price was too high, there was no local input of any significance, and its ‘budget car’ origins were all to plain to see. Buyers are a sophisticated lot, and when they saw the CityRover, they saw a case of subterfuge by a greedy and somewhat arrogant company.
However, it could have been so much different. Fundamentally, the TATA Indica is a good car – roomy, quick and stylish – and had MG Rover played to these strengths, and added a bargain list price into the deal, it would have flown out of the showrooms. As it was, it was overpriced in relation to competent new rivals such as the Fiat Panda and Kia Picanto, and buyers decided to stay away in huge numbers. In truth, perception did lag behind reality – the CityRover was not the terrible car some members of the media suggested – but with its reputation in tatters thanks to the botched launch and that pricing policy, it was never going to meet its sales targets.
In 2003, dealer principals and suppliers were shown a prototype CityRover (still known as RD110 at the time), and were canvassed for their opinions. One of the attendees said: “We actually thought it was a fresh and modern design, which could sell plenty of. However, MGR management told us it would sell for an entry price of £4995 – at which price point it would have flown out of the showrooms. We were also shown the saloon and estate versions of the Indica, and we gave it a firm thumbs down…”
Because of that, CityRover represents yet another missed opportunity in BMC>Rover’s long and turbulent history.