Essay : Rover vs BMW – the end of the road

Carole Nash Classic Insurance Specialists

AROnline‘s historian-in-residence Ian Nicholls delivers his verdict on the relationship that was BMW vs Rover between 1994 and 2000…

ARCHIV - Mit einem H‰ndedruck besiegeln der Gesch‰ftsleiter der British Aerospace, Dick Evans (l), und der BMW-Vorstandsvorsitzende Bernd Pischetsrieder in London den Kaufvertrag zur ‹bernahme des traditionsreichen britischen Autounternehmens Rover (Archivfoto vom 31.01.1994). Aufstieg und Fall liegen in der Karriere des Bernd Pischetsrieder dicht beieinander. Kein anderer vor ihm schaffte es an die Spitze der beiden Autokonzerne BMW und VW. Doch der 58- j‰hrige Bayer scheiterte sowohl in M¸nchen als auch in Wolfsburg. 1999 st¸rzte er wegen des ihm angelasteten Rover-Debakels bei BMW, und auch der VW-Konzern wurde zuletzt von Krisen gesch¸ttelt. Nun ist zum 31. Dezember 2006 Schluss. Foto: Gerry Penny +++(c) dpa - Bildfunk+++

The standard work on the downfall of Rover is End Of The Road  by Chris Brady and Andrew Lorenz. Reading it, one gets the impression that the authors saw BMW’s stewardship of the Rover Group as a forlorn hope, which, in many ways, it was. In fact, it could be argued that it was long before BMW’s 1994 purchase of the British carmaker for £800m.

In Chapter 17 of the book, the authors summarised thus: ‘The strategy, in its theoretical form, was sound enough. Buy an off-the-peg volume manufacturer and keep the branding separate in order that the stronger brand would not be diluted while the new organisation concentrated on building the weaker brand.

But the strategy was less robust in practice than in theory. For one thing, the Rover brand (as opposed to Land Rover) was effectively dead. For another BMW never came to grips with the Herculean task of implementing the strategy that had driven the deal.’

The benefit of hindsight

With the benefit of hindsight, it rather looks like the authors seemed to be of the view that, if BMW could not turn Rover around, then no one could. The most contentious statement in the above passage is whether the Rover brand was really dead in 1994 when BMW bought Rover off British Aerospace.

Another more recent book is The Rover Group – Company and Cars  by Land Rover insider Mike Gould – it’s an excellent work, with statistics which suggest that, what really did for Rover, was a gradual drift towards MPV/SUV/4X4 type vehicles by consumers.

The author berates the Thatcher Government for under-investing in Rover, forgetting that under the 1975 Ryder Report, British Leyland, as it then was, was meant to earn £1.5million in profit for every £1million invested by the taxpayer.

BMW vs Rover: the background

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That British Leyland catastrophically failed to make a profit was down to the self-destructive forces at work within the company and which convinced Government that the whole set up was doomed to failure. The knockdown sell off to British Aerospace was all part of a strategy to rid the public purse of the burden of propping up an organisation that seemed incapable of producing cars the public wanted to buy in large numbers.

What angers so many about the BAe sell off is that, when it happened, Rover actually started to come good. Ironically, it was Margaret Thatcher’s nominee as Chairman, Graham Day, who started the process. Day introduced a more market savvy approach to the company and at last tightened up build quality, not taking at face value assurances by the ex-BMC apprentices who dominated middle management, that cars were reaching the dealers in acceptable quality.

Cowley-built cars seemed to have been the worst. It was the quality of the Maestros and Montegos built at Cowley between 1983 and 1986 (above) that effectively destroyed the British Leyland careers of Chairman Sir Austin Bide, his Deputy, Ray Horrocks, and Austin Rover Managing Director, Harold Musgrove.

Quality woes of the 1980s

It was one thing to blame the then ongoing price war between Ford and Vauxhall, but to release into the public domain cars of unacceptable quality was another – and this was at a time when new car sales were at record levels. Not surprisingly, the Thatcher Government deduced that Austin Rover was a terminal basket case and tried to offload it to Ford in 1986 before the consequent political furore resulted in a climb down and a managerial ‘Night of the long knives’ culminating in the appointment of Graham Day.

While all this had been happening, Volkswagen UK had been adopting a different strategy to the price cutting tactics of the American-owned companies. Fronted from 1975 until his retirement in 1988 by Michael Heelas, who had been one of Filmer Paradise’s disciples at Austin Morris in the early 1970s, VAG UK majored on quality and reliability in its marketing campaigns.

It was a tactic that worked and established Volkswagen as a major player in the UK car market. Even today, years after he retired, Michael Heelas is referenced on the VAG UK website.

Going upmarket under Graham Day

Graham Day decided to take a leaf out of VAG UK’s book and take British Leyland cars upmarket. The Austin marque was unceremoniously dumped in 1987. Sad though this was, as the Austin brand had adorned many iconic vehicles, more recent recipients of the badge such as the Allegro, Maestro and Montego were nothing short of sales catastrophes and seemed to symbolise all that was bad about British manufacturing. British Leyland was re-christened Rover to emphasize the move upmarket.

It was the Anglo-Japanese Rover 800 that ushered in the brief resurgence of the Rover brand. After the early quality wobbles had been fixed, the 800 became a steady seller, with the original Roy Axe-styled version selling 193,531 cars in its lifetime. This was an average of 32,255 a year, which meant it annually sold better than the outgoing Rover SD1, which had average production of 30,000 cars per year and had been plagued by quality problems.

With the 800, Rover had, at last, arrested its long term decline. In 1988, the Government finally offloaded the Rover Group to British Aerospace (BAe), which was loathed to invest in what seemed an ultimately doomed enterprise. The asset stripping began almost immediately.

Factory closures

In 1988, Rover announced that it was to close Cowley South Works, the original Morris Motors factory, and concentrate production in the adjacent Pressed Steel plant, a feat accomplished by 1992.

Defenders of asset stripping, like late BLMC Director Jim Slater, cite the under-utilisation of facilities for asset stripping. In this case, Austin Rover management had criminally allowed poor quality Maestros and Montegos to escape the Cowley compound and doomed both the South Works and its workforce.

It could have been so different if those cars had been subject to meaningful quality control. South Works could still be with us today, churning out BMW MINIs in even greater numbers!

Land Rover undergoes a revolution

While all this was going on, over at Land Rover, Managing Director Tony Gilroy was laying the foundations of the 21st century success of the brand. In 1986, Land Rover only produced two vehicles, the basic Land Rover 90/110 and the original Spen King-designed Range Rover – that year, Land Rover produced 35,443 vehicles, a mere 7.98 per cent of total Rover car production. It was Tony Gilroy’s efforts in widening the appeal of the Land Rover brand that would backfire on the Rover saloon car marque.

The irony was that the Solihull plant was the ancestral home to both brands. The original Rover company had managed the Solihull plant as a wartime shadow factory and moved in full time after the hostilities because of bomb damage to their original Coventry plant. It was at Solihull that the Wilks family, who dominated the Rover management, had nurtured the original Land Rover as a temporary stop gap alongside the Rover car range.

The Land Rover sold in huge numbers to farmers, the Third World and armed forces all over the world while solid Rover saloons such as the P4 appealed to the professional classes. The revolutionary Rover P6 saloon, masterminded by a team led by Peter Wilks, was the right car at the right time.

Looking to the past for a precedent

It was not just the technical prowess that made the Rover P6 a success, it was its overall package. Like the rival Triumph 2000, Rover had created a car that appealed to the fleet market. Ford Cortina-driving sales reps who were promoted to executive status could upgrade to a Rover P6 at a time when Ford’s own upmarket barges were unappealing. The P6 was the blueprint of everything a volume executive car should be.

The aging P4 saloon ceased production in 1964, leaving the P5 as the only other Rover car in production. An upmarket, luxury saloon, much improved in 1967 by the ex-Buick V8 engine, it too typified all that was best about the Rover marque.

Unfortunately, the confidence permeating Solihull seemed to fade away as the Wilks family gradually relinquished control. In December 1966 Rover was absorbed into the Leyland group and, in May 1968, it became part of British Leyland. By 1970 only Peter Wilks and his cousin, Spen King, had any influence over Solihull. The British Leyland merger resulted in many Ford UK personnel being recruited with their obsession with cost control and never mind the quality.

Cost-controlling British Leyland

Such an approach might have been valid in regard to high-volume cars like the Ford Cortina and BMC 1100/1300 but was it appropriate for more upmarket saloons?

As well as the manufacturing costs of the Issigonis front-wheel-drive range being called into question, attention was drawn to the Rover P6 and its basic chassis frame construction, onto which body panels were attached. A consequence of this was that the replacement for the P6, the Rover SD1 would be designed down to a price.

It appears no one in Rover Triumph questioned the rationale emitting from ex-Ford finance men whose previous employer was not setting the world alight with its own executive car, the leaden Zephyr/Zodiac Mk4. In addition to this, many European buyers felt that Ford’s British built-to-a-price cars were crude in comparison with rival rear-wheel-drive cars from the likes of Fiat, Opel and Peugeot.

And the rot sets in

SD1

The Rover SD1 was launched in 1976 as ‘Tomorrow’s Car Today’, its futuristic styling masking some of its less advanced features. Assembled in a new purpose-built plant adjacent to the Solihull complex and now controlled by the remote Leyland Cars, fronted by Derek Whittaker, the new SD1 should have been the car that took the Rover brand to greater heights, particularly as Britain was now a member of the Common Market and the SD1 did not have to endure the trade tariffs that had afflicted the export P6 for most of its life.

However, in the Britain of the 1970s, concepts such as ‘just-in-time’ were a joke. SD1 production was afflicted by strikes, both internal and external. Unfinished cars were stockpiled in the open, awaiting parts from strike bound suppliers, corners were cut in order to meet production targets and quality inevitably suffered. And, as Jaguar later found out, the quality of some of the bought-in components was less than sparkling. On top of this, the workforce refused to endorse the introduction of a nightshift for what, at the time, was Britain’s most-desired car.

The German-built Ford Granada arrived in 1978 and, although it looked like a Cortina on steroids, it was well built, reliable and available in a more economical 2.0-litre version as the world endured a second energy crisis. As a brand, Ford had not been in the same league as Rover, but the market preferred the Blue Oval.

Was the workforce to blame?

The SD1 debacle was blamed on the Solihull workforce but, even if a nightshift had been introduced, would the quality have been any better? Effective quality control at Solihull probably went with the abolition of the Rover board in 1975, courtesy of the Ryder Report. There was no one on site with the real authority to get a grip on quality without fear of retribution from above.

It was Sir Michael Edwardes who decided to shut down the Solihull SD1 plant, but his choice of alternative factory to build the big Rover was hardly cause for celebration – the same plant that would badly assemble all those Maestros and Montegos, Cowley!

With the final departure of Rover saloon production in 1982, Solihull became the domain of Land Rover. The Rover SD1 debacle was the first nail in the coffin of the Rover brand. Instead of establishing Rover as a top-rank manufacturer of premium executive cars to rival the likes of Audi, BMW and Mercedes-Benz, the SD1 stumbled and became an also ran, although it was a winner on the racetrack.

The Rover SD1 was meant to be a quality car, except the quality was sadly lacking – perhaps it escaped through the large panel gaps? The problems of the SD1 had the effect of diminishing the Rover brand, particularly in export markets, that BMW would have to build on.

From SD1 to Land Rover – Solihull revival

When Tony Gilroy took the helm of Land Rover he inherited the empty SD1 plant in Solihull. He decided to close down nine outlying Rover Triumph plants and transfer production into the vacant SD1 plant. One was the gearbox plant at Pengam near Cardiff, which made the LT77 transmission.

The Japanese were now making serious inroads into traditional Land Rover territory as sales of Solihull’s long-running breadwinner began to seriously decline. Land Rover did introduce improvements to the vehicle, now called the 90/110, but, as the belief that the Solihull vehicle could not match the oriental opposition for quality and reliability had taken hold, Tony Gilroy decided not to compete head on with the Japanese. Instead, he decided to move the Land Rover brand upmarket. The first stage was to turn the Range Rover, which had been starved of investment since its introduction in 1970, into a luxury car.

In doing so Solihull effectively filled the gap left by the Rover P5B, which ceased production in 1973. Rover had wanted to replace the P5B with the Rover P8, which had been cancelled by British Leyland in 1971. The reasons for this cancellation are confused. The P8 was axed because it failed crash tests or because of pressure from Jaguar’s Chairman, Sir William Lyons, who saw the P8 as a threat to his XJ saloons.

Sales slipping away

BLMC Chairman, Lord Stokes, seemed to imply in a May 1973 interview that the P8 was axed on cost grounds. As Jaguar could not satisfy demand for its saloons, perhaps there was room in the market place for the P8? Certainly many customers would not wait for their XJ and ordered a German car instead.

Thus, the Range Rover was moved upmarket and it was decided to create a cheaper 4×4 from Range Rover underpinnings, which became the Discovery, launched in 1989. Sadly, by this time, Tony Gilroy had left Land Rover after a managerial disagreement. Fears that a cheaper model would impact on Range Rover sales were unfounded. In 1990, Land Rover produced 68,471 vehicles, now 14.42 per cent of Rover Group production. It was a gradual process that, by and large, passed unnoticed by the media, but, bit by bit, sale by sale, Solihull was clawing back the ground lost during the British Leyland era.

In 1968, the year of the BLMC formation, Solihull produced 44,928 Land Rovers, 1779 Rover P5Bs, 33,106 Rover P6s for a total of 79,813.

Popularisation of the Rover marque

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Meanwhile, over at Rover Cars, the car company formerly known as Austin-Morris, the latest collaboration with Honda was announced as the second-generation Rover 200, codenamed R8 (above). The first-generation 200 had been a surprise hit. It had not been the most exciting looking car in the world, but its combination of Japanese build quality mated to superior equipment levels, had appealed to retirees and people who wanted to downsize to something smaller and more economical. The SD3, as it was known, could be likened to the upmarket, badge-engineered versions of the ADO16 1100/1300 series, a 1980s version of the Riley, Wolseley or Vanden Plas ADO16s, a badge-engineered Honda.

It seemed as if Rover has stumbled across its equivalent of the Volkswagen Golf. The original 200 might not have been looked on as a true Rover by enthusiasts, but it was better built than any SD1.

The R8 expanded on this theme. The new Rover was available in a multiplicity of variants as the new slick, market-savvy Rover exploited every sales opportunity. All the petrol engines came with 16 valves and fuel injection, including the new 1.1- and 1.4-litre K-Series. Just as the Rover P6 resembled in packaging terms, an upgraded Ford Cortina, the R8 looked like a superior version of the best selling Escort Mk3/4. The R8 was an immediate hit, and what’s more, was built with the desired quality right from the start.

Some 950,000 were built between 1989 and 1998, with production peaking in 1994 at 191,114, when its R3 replacement was on the horizon. And Rover was able to get away with selling it at a premium price over its Ford and GM rivals.

Rover’s 1990s renaissance

It was the success of the R8 that has encouraged many enthusiasts to believe that Rover Cars, with a bit more intelligent management, could have become a sustainable success story. Behind the façade of the R8’s success, Rover had become dependent on Honda in order to develop cars cheaply. Honda, though, was no longer willing to play ball and imposed restrictions, resulting in limitations to design freedom in transforming Honda designs into upmarket Rovers. The forthcoming Rover 600 and HHR/400 were subject to these restrictions.

Honda was also in the process of establishing a European manufacturing base at Swindon, and the need for a link up with Rover in order to gain access to the large European car market was superfluous. Rover needed a new design partner fast.

The other problem for Rover was that the R8’s 16-valve technology was easily and quickly copied by the opposition. It had taken rival firms years, if not over a decade, to come up with their competitors to the BMC Mini and ADO16. However, in the case of the R8’s rivals, existing models could be easily modified to take 16-valve engines, and negate Rover’s technical lead.

Also the R8’s success came at a time of world recession. Bad timing meant that Rover was unable to reap the true benefit of its innovation.

Lost opportunities under British Aerospace

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It was during British Aerospace’s ownership of the Rover Group that the last real opportunity to build a properly-funded new executive Rover without restrictions, to rival the German makes, existed. However, the decision was taken to facelift the existing Rover 800 under the project name R17, which was announced in 1991 and never sold in anything like its previous quantities.

A glance at the production figures suggests that British Aerospace’s parsimony was not without reason. Once the newer, and very stylish Honda-based Rover 600 went on sale in 1993, 800 sales appear to have migrated to the newer model. With petrol, diesel and a near 200bhp performance version, the Rover 600 was a more than competent car.

However, BAe did sanction the development of the second-generation Range Rover, the P38A, perhaps sensing that there was more profit in that.

Building more SUVs

Also Land Rover persuaded the Rover Group management that the way forward was to develop a new smaller 4×4 employing the Longbridge built K-Series engine and a diesel unit. This became the Freelander – in a sense, this was the real successor to the Rover 800, but because they came from different divisions of the same organisation, nobody sees it that way.

If the 1980s had been the triumph of the hatchback, the 1990s saw a gradual shift away from traditional cars towards SUV/MPV/4×4 type vehicles. Unitary construction had ushered in an era of low slung vehicles, of which the Issigonis Mini was the most extreme but, by the 1990s, more and more people were no longer prepared to bend down in order to get into a car shod with 13 or 14in wheels.

SUV/MPV/4×4 type vehicles offered space that saloon cars, encumbered by more and more safety regulations, could not match. Ever-improving diesel engine technology also meant that these vehicles did not necessarily need to be expensive to run and sound like a 1970s Royal Mail Commer van. Land Rover was poised to exploit this change in consumer buying habits, Rover Cars was not.

Great takeover: the arrival of BMW

In 1994, the year British Aerospace sold the Rover Group to BMW, Rover produced 478,866 cars. Of this total, 94,716 were Land Rovers, 19.78 per cent of the total. Solihull was now producing more vehicles than in 1968 when the Rover brand was at its zenith. There might have been question marks about build quality and productivity, but something was clearly going right. Whether they liked it or not, Rover now had a new design partner in the shape of BMW, but was it the right partner?

The name Rover conjures up images of executive cars. The name BMW also conjures up images of executive cars…

That was a marriage which was never going to work. There was model overlap in several places which were crucial to Rover’s revenue stream. The most obvious was in the top of the range Rover 600 and 800. BMW was certainly not going to fund a direct 3 and 5 Series rival for these cars.

Exciting sporting development

Also in the pipeline was the MGF sports car, announced in 1995. MG had withdrawn somewhat acrimoniously from the large American market in 1980. An owner with deep pockets could have settled any outstanding legal disputes and re-introduced MG into the US market.

In 1986, when Ford tried to buy Austin Rover, it had a 25 per cent share in Mazda, which was developing the MX-5. Had Ford gained ownership of the MG brand, they would have exploited it. However, in 1995, the MG moniker was owned by BMW and they had the Z Series of sports cars. So the MG brand was untapped outside Europe, and sadly remains unexploited to this day. The heyday of MG sports cars in the USA is now but a distant memory.

Another problem was Honda, which, having declined to buy Rover outright, demanded royalty payments for the models they had helped to design. This meant that, until BMW-funded designs came on stream, Rover Cars had little chance of being profitable. This scenario did not apply to Land Rover.

New model army – innovation and disappointment

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In 1995 Rover announced the R3, the third-generation 200, based on a shortened R8 floorpan, and the new HHR/400, which was based on the contemporary Honda Civic. Honda engines were now out, and were replaced by enlarged K-Series engines of 1.6 and 1.8-litres. Although the R3/200 was officially the first all-British Rover/BL car since the Montego of 1984, presumably because it used a shortened R8 floorpan, it still incurred royalty payments to Honda.

The conventional view is that the HHR/400 was an overpriced failure, that the brand loyalty built up by the R8 evaporated and customers returned to the likes of Ford and Vauxhall with their new 16-valve engines. The figures show that, in its best year of 1996, 123,514 HHR 400s left Longbridge, and on face value the car seemed to have failed in comparison with its R8 forebear.

What complicates the picture is that Rover replaced the R8 with both the HHR/400 and the R3 200. In 1996, Rover produced 108,913 R3s, a combined total of 232,427. In 1997, the HHR 400 declined to 119,455, whilst R3 production soared to 144,096, a combined total of 263,551. Total Rover cars production for 1997 was 381,206, the best since 1990.

The picture was also complicated by the fact that both the Maestro and Montego had ceased production in 1994.

BMW vs Rover: Investment in the UK

BMW invested £600 million in Rover in 1997, but it appears that the dependence on Honda, which had enabled Austin Morris/Rover to survive the 1980s, was now coming back to haunt them. As well as royalty payments to Honda, the enlarged K-Series engines, which were intended to end dependence on the Japanese firm for power units, were now experiencing serious head gasket issues.

All this had to be fixed under warranty, at great expense, and it might be added, inconvenience to the customer.

Although BMW/Rover tried to keep a lid on things, word gradually got around that the K-Series engine was less than reliable at a time when Ford was upping its game with the Mondeo and Focus. The Land Rover Freelander went on sale in 1997. Initially available with a 1.8-litre K-Series and a 2-litre L-Series diesel, the new addition to Solihull’s portfolio was another hit. Also in the pipeline was a 2.5-litre KV6-engined variant.

Long-term solution for short-term fix

It appears BMW’s policy was to weather the storm, and the losses, until a properly-funded and developed new range of Rover cars hit the showrooms. The same applied to the head gasket failure issues with the K-Series. It appears BMW’s attitude was to effect repairs under warranty and ultimately resolve the problem by replacing the K-Series with new engines that would be built at a new factory at Hams Hall, Birmingham.

The most publicised of the planned new cars was a brand new Mini to replace the Issigonis classic. In late 1990s Britain, dubbed ‘cool Britannia’ by the intelligentsia, where Brit Pop was the music of the moment, the Gallagher brothers were seen as spokesmen for their generation and Tony Blair was in Downing Street, the 1960s were seen through rose-tinted spectacles. The Mini suddenly became fashionable again as it approached its 40th birthday.

BMW harnessed the zeitgeist and pressed ahead with developing its 21st century take on an automotive icon. Rover’s own take on a new Mini focused on its economy car virtues. BMW focussed on a more sporting, fun-to-drive vehicle that would retail at a premium price. BMW’s idea won through.

The MINI adventure was packed full of surprises

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The biggest surprise about the new Mini, codenamed R50, was the decision by BMW not to use the Rover K-Series engine, but a Chrysler unit made in Brazil. To conspiracy theorists this is proof that BMW intended to asset strip Rover, and the decision has never been satisfactorily explained. It is said that Ford tried to buy Austin Rover in 1986 in order to get hold of the K-Series engine.

Now in the late 1990s BMW seemed to be rejecting the unit. In 1997, a new Mini R50 concept car was unveiled by no less than John Cooper. The Frank Stephenson design looked like a bloated pastiche of the BMC original. However, as history records, BMW got everything right with what became its new MINI.

The new MINI was intended to replace both the Rover 200/R3 and the Rover 100/Metro and would be built at Longbridge. Unfortunately, though, the 100/Metro had to be pulled from production in December 1997 when the model’s failure in crash tests became widespread public knowledge. Orders dried up and production was halted. From Rover’s point of view it was a disaster as the 100/Metro had no Honda DNA, and therefore there were no royalties to pay. At a stroke some 40,000 cars were knocked off Longbridge’s annual production and there was nothing to fill the void.

Customers melting away

Many customers probably defected to the Sunderland-built Nissan Micra K11, an attractive small car design, which seemed to have already made serious inroads into traditional Metro/100 territory. As recently as 1994 Longbridge had produced 81,782 Metros. It could also be argued that the Micra K11 had classic Mini styling cues and demonstrated that it was possible to build a small car without resort to the inflated extremes of BMW’s R50.

The HHR/400 would be replaced by Project R30, which, it was proposed, would be built at Cowley, possibly as the Rover 55. The car would use a new generation of engines built at Hams Hall, again suggesting that the K-Series was superfluous to BMW. Also in the pipeline was a third-generation Range Rover, codenamed L30 by BMW. Bizarrely, the Range Rover Design Team was shipped over to Munich and told to design the vehicle they always wanted to. According to Mike Gould, there was a lot of BMW X3 and X5 in the resulting vehicle.

The only BMW-financed Rover car to reach production before the men from Munich walked away was Project R40, the Rover 75.

Rover’s last chance saloon

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The Rover 75 was intended to replace the Honda-based 600 and 800 models, but was the model really needed at all? In 1998, Land Rover produced 60,654 Freelanders, and that was just the beginning. These were mainly conquest sales. Surely the Freelander could do everything the 75 could do without threatening BMW 3 and 5 Series sales?

The Rover 75 was designed with no cost constraints on components to be a quality car. But restrictions were placed on its intended market slot and its styling was controversial to say the least. The intention was to slot the Rover 75 just below the BMW 3 and 5 Series – in marketing parlance, it was meant to be in the lower D-segment.

The resulting car had a cramped passenger cabin, which no matter how fine the engineering, was not going to attract the family man and dog owner. On top of this the car had retro styling that made it look as if it should be in the nearest classic car show.

Rover 75: Marmite styling

Styling is subjective, and, in its own way, the Rover 75 was a fantastic looking car, but for the model that really was Rover’s last chance saloon, it was a grave misjudgment. Just as the contemporary Jaguar S-Type was an American car executive’s view of a traditional British car, so the Rover 75 was a German car executive’s view of a traditional British car.

The Rover 75’s styling cues were taken from the P4 and P5 cars, which were not big sellers when they were current. Apart from the front seat design, there was no acknowledgement to the car that really put Rover on the map, the P6. For the kind of owner who could afford a Rover 75, the P6 would have been the Rover of their teenage memories, not the staid P4 and P5. Car manufacturers are always banging on about attracting younger buyers but, if a company deliberately set about designing a car for more senior motorists, it would be hard to top the Rover 75.

And, if retro styling was such a good idea, why didn’t BMW apply the same principles to its own Chris Bangle-designed cars?

BMW vs Rover: the end is in sight

It was during 1998 that the wheels began to come off BMW’s plan to regenerate Rover. The increasing strength of sterling began to affect Rover. Exports were now more expensive and imports, which included many Ford and GM cars, were now cheaper. BMW executives began to speak publicly about the problems affecting the Rover when announcing cuts in production. Another beneficiary of the strength of sterling was BMW themselves, as Britain sucked in more 3 and 5 Series, though they kept quiet about it.

BMW decided to bring forward the announcement of the Rover 75 to the Birmingham NEC Motor Show in October 1998 as a spoiler to Ford’s planned announcement of its equally retro-styled Jaguar S-Type. Only four weeks before, BMW Chairman, Bernd Pischetsrieder, had frozen investment in the Rover R30 and R50 Mini projects, as the pressure from BMW shareholders to abandon the Rover project mounted.

His speech at the Rover 75 launch was to cause shockwaves: ‘Short-term actions are required for the long-term future of the Rover Group. Talks are taking place with the British Government about the whole problem.’

The NEC debacle

Bernd Pischetsrieder told his audience that Longbridge was unviable unless drastic cost-cutting occurred, thousands of workers made redundant and more flexible working practices introduced. Otherwise it would close. He went on: ‘Only if those three elements – cost cuts, productivity improvements and Government aid – were in place, would the Mini and R30 proceed.’

During 1999 BMW’s problems with Rover were fully aired in the media. BMW demanded a £200 million aid package from the New Labour Government, pointing out that the previous Conservative Government had given £125 million to Nissan in 1986 and, more recently, some £72 million to Ford for the Jaguar plant at Castle Bromwich.

BMW successfully persuaded the Rover unions to agree to more flexible working practices but, in February, BMW Chairman Bernd Pischetsrieder resigned to be succeeded by Joachim Milberg. Lorenz and Brady wrote: ‘Up to 100 BMW engineers were, by that stage, playing key roles inside Rover. Many were working at Oxford to repair the quality problems that had already put the new Rover 75 executive model eight weeks behind schedule for its planned March launch.’

A slow start

The inference from this statement was that Rover was incompetent and incapable of doing the job themselves. The increasing transfusion of BMW staff into Rover was also a sign of the Munich management’s control freak approach to running its British subsidiary.

Volume production began on 29 April 1999 and the Rover 75 finally went on sale in the UK in June. BMW/Rover boasted that, by July, Cowley production would be 1660 cars per week graduating to 2800 per week by the end of the year. It was expected that export sales would take around 70 per cent of production. Hence, if we assume the Cowley plant worked a 50 week year, then total annual production of the Rover 75 would be 83,000 rising to 140,000 cars a year! These were levels way above anything seen for a British-built executive car.

In writing this article, one is struck by a sense of déjà vu. The common scenario is thus: Austin Morris is taken over by another company that believes that the staff at Longbridge and Cowley are, by and large, inept. The new owners convince the media that they are infallible and use their coffers to fund a new range of models. One of the new crucial models has completely unsuitable styling for its task in hand and ludicrous sales projections. It bombs…

An unequal failure

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Three decades earlier it was Lord Stokes, Leyland and the Allegro. Now history was repeating itself. In 1999, Cowley produced 53,581 Rover 75s, followed by a further 28,388 in 2000, neither total being for a full calendar year, but it comes to a grand total of 81,969.

Much of the blame for the relative failure of the Rover 75 has been attributed to BMW’s washing of its dirty linen in public. In expectation of a Government aid package, the new BMW management had decided to press ahead with the R30 and R50 projects. However, the Government decided to downgrade the aid from £200 million to £118 million over five years. This had infuriated BMW, which had invested £2.5 billion in five years of Rover ownership, and had plans to invest a further £1.5 billion over the next three years.

This was considerably more than the British state had spent on British Leyland/Rover from 1975 to 1988. Most of this had been squandered, subsidising strikes, while investment in new plant and machinery had been wasted thanks to poor quality control, which meant that sales targets were unattainable.

Government (un)intervention

The New Labour Government was very astute in avoiding the mistakes of its predecessors, a policy that would sustain them in power for thirteen years. One of these perceived mistakes was the provision of state funds for lame duck industries. However, the situation confronting the Government in 1999 was very different from that of, say, 1977. The unions were not part of the problem, they were part of the solution.

Tony Woodley of the Transport and General Workers Union was one of the heroes in the effort to keep Longbridge in business but the New Labour Government was obsessed with its public relations image, and this influenced its decision-making process. To the ordinary person in the street, Rover was in trouble because they made lousy cars. Ford, Peugeot and Vauxhall were okay because they made good cars. What Joe Public did not comprehend, though, was that, in times of strong currency fluctuations, the big boys simply imported more cars into Britain instead of building them at their UK plants.

In 1999, the mindset was that British cars, apart from the classic Mini, were decidedly uncool. This was a hangover from the British Leyland era, though it was probably a decade since a badly-built car had left a Rover car plant. The irony was the one car Rover could not build to modern quality standards was the classic Mini, and its antique build methods pushed down the Longbridge productivity figures. Its reliability was also well down the league of new cars on sale in 1999.

A less-than-impressive performance

Eventually, the Government upgraded its offer to BMW to £150 million, but this only happened after more negative exposure in the media. A consequence of all these shenanigans, carried out in the media spotlight, was that Rover sales collapsed during 1999 and the company haemorrhaged cash. The R3/200 was rebranded as the Rover 25 and the HHR/400 became the Rover 45 to bring them into line with the new Rover 75.

In 1999, the Rover Group built 395,307 cars. This was broken down into a mere 215,493 from Rover Cars and 169,426 for Land Rover as Solihull continued to surge ahead. Land Rover alone built 70,266 Freelanders, considerably more than the Rover 75. As for the Rover 75, the applause for the car was unanimous, the best ever car to adorn the Rover badge, some say. But who was actually going to buy one?

Again there is a sense of déjà vu with the Rover 75. We had been here before. Like the Rover 75, the BMC 1800 Landcrab, had been praised to the hilt and won a host of awards on its debut in 1964, yet it spectacularly missed its sales targets. Ironically, they each ended up being built at both Cowley and Longbridge.

Slow production build up

In 1998, Rover had built a combined total of 46,794 of the outgoing 600 and 800 models. The 1999 production total of 53,581 Rover 75s was little improvement, but actually good by British standards, if not to BMW’s expectations. The best year for the Triumph 2000/2500 had been 1970 when Canley built 32,074 examples. Records are incomplete, but the best year for the Rover P6 appears to be 1967 when Solihull churned out 34,899 cars, all of them would have been of the 2000 model.

The best year for the Rover SD1 was 1978 when Solihull built 54,462 examples of what was then Britain’s most-wanted car. The Rover 800’s best year was 1987 when 54,434 left Cowley. The Rover 600 wins the prize though, with 61,413 being produced in 1995. The 600 would have probably sold even more, but as it was heavily based on a Honda design, BMW we reluctant to promote it. It was in the design stage of the Rover 600 that the retro design theme had been first mooted, but the 600 was more subtle in its approach than the 75 in its balance between retro and modern.

After the Government had agreed to a £150 million aid package, things seemed to go quiet on the Rover front. The cavalry, in the form of the R50 MINI was on the horizon and BMW just had to bide their time until it reached the showrooms. Then into the picture came Alchemy Partners, founded by Eric Waters and Jon Moulton, who opened a dialogue with BMW in October 1999.

Alchemy’s motives may have been entirely genuine, but they implanted into BMW’s corporate head the notion that they could walk away from Rover. It dawned on them that, with the X3 and X5 in the BMW stable, Land Rover was superfluous and could be easily sold on. With overcapacity in the European car market, there was no real hope of selling Rover Cars to a major player, so thoughts then turned moving the R50 Mini into the smaller Cowley plant and selling Longbridge to Alchemy Partners, with their ideas for MG, a brand BMW had no interest in promoting.

BMW pulls out to leave Rover floundering

It was in March 2000 that the Schweppes hit the fan, when BMW’s plans to extract itself from the Rover morass hit the headlines. The rest of the story is well known. Alchemy’s sports car plans for Longbridge involved redundancies, which met with all-round hostility. Having broached the idea that BMW could walk away from Rover, the talks between Alchemy Partners ultimately collapsed.

Then Phoenix Venture Holdings arrived onto the scene, fronted by former Rover boss John Towers. Seemingly with the support of the entire nation, they were hailed as heroes as they came to the rescue, and the Government brokered a deal to save Longbridge.

Lifelines for MINI and Land Rover

BMW then managed to offload Land Rover to Ford for £1.8 billion, which somewhat compensated for their huge investment in the Rover Group. This was beneficial to Land Rover as it gave them access to the Ford parts bin in its search for a replacement engine for its venerable V8, and Jaguar had just what they wanted. The irony was that the Jaguar XJ40 had allegedly originally been designed to be incapable of taking the Rover V8! Ford found out that the buildings at Solihull were in a poor state of repair even after six years of BMW ownership.

Phoenix Venture Holdings used Longbridge as the base for the newly renamed MG Rover Group but soon found out that the patriotic public support they had received did not translate into new car sales. MG Rover’s collapse in April 2005 was inevitable, but that is another story.

BMW moved R50 production, now called the MINI into the Cowley plant. While staff awaited the production facilities to arrive from Longbridge, they ganged together to help re-paint the buildings. Again, why did the factory need re-painting after six years of BMW ownership? The new MINI was launched in 2001 and has proved to be an enormous success, guaranteeing job security for thousands of people.

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Conclusions

Who, then, were the heroes and villains in this story and was Rover a sustainable brand?

As related earlier, the standard work on the subject is End Of The Road by Chris Brady and Andrew Lorenz, which is a bit like a latter-day Leyland Papers, the 1971 book by Graham Turner on the formation of British Leyland. Again more déjà vu! Both books describe the takeover of Longbridge and Cowley by an outsider that arrogantly thinks it knows better, and both books are reluctant to acknowledge that the new owners were fallible.

The heroes are Tony Woodley of the TGWU, who valiantly fought for Longbridge and helped banish the 1970s images of ‘Red Robbo,’ Tony Gilroy for his vision in expanding the Land Rover brand that continues to bring great success and Sir Graham Day who managed to stop the rot at British Leyland/Rover, and create a base for others to build on. What about the villains, then? Well, let’s examine the role of the parties involved in the collapse of the Rover Group in 2000.


THE GOVERNMENT

There will always be those that blame the Thatcher Government for the ultimate demise of Longbridge for selling the Rover Group to British Aerospace in 1988. To these people Rover was a national asset and was sold off for a song. That’s an entirely valid point of view.

However, the Austin Rover era, when lack of quality control had squandered the states investment, had completely destroyed the business case for continuing to prop up British Leyland.

Regretfully, Austin Rover only had itself to blame for this fiasco. Back in 1986, it seemed only a matter of time before Longbridge and Cowley were shut down, therefore getting British Leyland/Rover off its hands was a Government priority. No one expected Graham Day and his team to perform a minor miracle and stop the rot, by making sure the cars were assembled properly and subjected to effective quality control. Since 1975, the Government had seen, and highly paid, a succession of top-notch executives who had failed to deliver at British Leyland. Even the much vaunted Sir Michael Edwardes, who had successfully confronted the powerful British Leyland Combined Shop Stewards’ Committee, failed to deal with the endemic quality issues plaguing the company and stop the slide in market share.

Thus, offloading Rover to a third party was seen as a way of taking its problem child off its hands and removed the prospect of making what seemed an inevitable decision to pull the plug on the company. The political bonus was that British Aerospace was a British company.

At the time of the sale comparison was made with Saab, a company that also made both cars and aircraft. Like Rover, Saab cars would also be bought out by a larger motor manufacturer, in this case General Motors, again with talk of boosting the brand, and that also ended in tears.

Some people also criticise the Blair Government for not stumping up the full £200 million BMW demanded in aid in 1999, instead offering £150 million. However, whether this would have persuaded BMW to stick with Rover is open to debate.


BRITISH AEROSPACE

British Aerospace are often criticised of underinvesting in Rover, and the company was certainly guilty of asset stripping through its property company, Arlington Securities.

However, it is easy to make judgements when it is not your own money at stake. The main criticism of British Aerospace is that, instead of developing an all-new model to replace the Rover 800, it took the cheap way out and funded a facelift of the car known as the R17, which appeared in 1991, but never sold as well. But it seems as if British Aerospace made the right choice after all. The R17 800 model tided Rover over until the 600 came on sale in 1993, and the real investment went into the Land Rover Freelander, which was an addition to the Rover Group’s model portfolio and sold in quantities that no large Rover saloon could match.

Where British Aerospace were culpable was in its choice of buyer for Rover. BMW, as a major motor manufacturer, was bound to antagonise Honda. The ideal owner for Rover was a company with little or no motor manufacturing interests, who could keep Honda on board.


HONDA

Honda is neither a hero or a villain in this story. The Japanese company had enabled Austin Morris/Rover Cars to survive the 1980s. However, its refusal to buy Rover outright meant the future of the brand was always problematical.

While it lasted, the collaboration between Rover and Honda produced some genuinely nice cars, with perhaps the Rover 600 being the best of the bunch. The concept of a Rover as an upmarket car with Honda underpinnings was a profitable venture in the early 1990s, particularly in Europe. Rover’s success in exporting to Europe at a time of recession attracted the attention of BMW.

However, after the BMW takeover, Honda demanded and got royalty payments for all the cars they had had a hand in developing and this destroyed Rover’s profitability.

Rover had amortised development costs through co-operation with Honda. This meant it could make a profit on relatively low volumes. BMW found that, because of royalty payments to Honda, it could not make a profit on the Rover range it inherited. Salvation appeared to lie in the next generation of BMW-funded Rovers, the R50 Mini, the R30 and the 75 but, because these new platforms were unique to Rover, then a relatively small manufacturer, the new models would require huge volume to make them viable and, saddled with retro styling, this was never going to work.

Honda had saved Rover in the 1980s, but in the 1990s they held the key to its long-term survival. A full-blown takeover of Rover by Honda was probably the only realistic way that the British firm was going to survive, a solution many must have hoped for, but it was not to be.


LAND ROVER

While the whole Rover/BMW saga was playing out, Land Rover got on with the job of developing the best offroad vehicles in the world. This was an area that even BMW could not pretend that they knew better. If any brand has consistently got things right over the last quarter of a century, it is Land Rover, as they have been able to exploit the drift away from traditional saloon cars.

It was Tony Gilroy who started the push to expand the brand’s appeal, but perhaps credit should be given to the father of the original Range Rover, the late Spen King. While the glory days of Cowley and Longbridge had been back in the days of Beatlemania, mods and rockers and miniskirts, in 2000 the good times for Solihull were only just beginning. Why buy a car when you can buy a Land Rover?


BMW

The German carmaker would like us to think of them as heroes for investing billions into Rover and trying to change an ingrained culture that dated back to the BMC era.
However, in researching this article, I have gained the impression that BMW ultimately bottled it. Those on the left of the political spectrum like to berate shareholders for having short-term interests, of not being able to see beyond the next dividend. In this case BMW bowed to pressure from shareholders to ditch Rover.

How many of these shareholders actually knew BMW was having to make royalty payments to Honda? As events panned out, both Land Rover and the new MINI became very successful. Demand is outstripping the ability of both Cowley and Solihull to supply the market, and both brands now have production facilities elsewhere.

Had BMW retained Rover, the huge Longbridge complex that analysts claimed was too big to be viable, would have provided the capacity that was needed. Remember that the R50 MINI was originally going to be produced at Longbridge. How much has BMW invested in order to produce the latest MINI in the Netherlands and Austria, in order to supplement Cowley production when Longbridge had all the capacity BMW needed? Back in 1964/65 Longbridge produced 376,781 vehicles.

BMW expected too much, too soon from its Rover subsidiary. It appears it was taken by surprise by Honda’s demand for royalty payments, which completely scuppered any hope of a profit on the interim, Honda-based cars. BMW also come across as arrogant. It seemed to think that its very ownership of Rover would have a halo effect, that BMW brand values were all conquering, that buyers would flock to Rover dealerships and sales would take off.

When this didn’t happen, BMW began to micro-manage Rover by sending more and more personnel over from Munich to get a grip on its ‘English Patient’. 1997 was the Rover Group’s best ever year, when it produced 522,566 vehicles, but BMW was not satisfied.

Had BMW held on until 2002, it might have seen the green shoots of recovery as the R50 MINI reached the showrooms. The problem with all this pontificating is that, although we know the R50 MINI and Land Rover went on to success, they were not the only models BMW planned for Rover, and their vision of what a Rover saloon should be was not so promising.

The Rover 75, and no doubt the R30 as well, relied too much on retro styling. Parallel to this was the retro styling imposed by Ford on Jaguar. Both the S-Type and the X-Type failed to meet their sales targets, despite the copious quantities of cash injected into Jaguar by Ford.

Once the design shackles were removed, and Jaguar was allowed to design the car they wanted to, the XF, sales took off. What this served to prove was that retro styling deterred buyers. The notable exceptions to this rule being the BMW MINI and the new Fiat 500. BMW blamed the strength of sterling for its Rover debacle, but the company’s real mistake was to discuss its problems in the full glare of the media spotlight.

Bernd Pischetsrieder’s speech at the Rover 75 launch in October 1998 and the ensuing attempt to get Government aid sent Rover sales into freefall. Again, BMW expected too much, too soon of Rover. The more money BMW injected, the more cars Rover had to sell to be viable, and the opposition was not going to simply roll over and give up market share as BMW seemed to expect.

It had taken decades to build up the BMW brand, but the men from Munich expected miracles from Rover and their interim, Honda-based cars. When these miracles did not happen, Rover got the blame and BMW walked away. The scenario with Rover was also played out with Ford and Jaguar and General Motors and Saab. With all the management speak of growing the brand, nobody questioned who was going to buy all these extra premium-priced cars.

The Rover brand certainly was not dead in 1994, but it was by the time BMW had finished with it.


ROVER

The headgasket issues with the K-Series engine was the only real blot on Rover’s conduct during this period. The failure to deal with the issue promptly, and the fact that many owners had tortuous dealings in seeking both rectification and recompense, only helped to tarnish the Rover brand in the eyes of consumers.

Rover’s employees were hapless bystanders as the drama unfolded. They had left the days of Red Robbo and mass meetings in Cofton Park long behind them, and did all that was asked of them by their masters. They have had to put up with the inference by analysts that Rover failed because its employees and methods were not fit for purpose. This is palpably untrue.

Ian Nicholls

Born in Bedfordshire but now residing in Norfolk, Ian Nicholls is an ardent BL enthusiast. Currently he owns a Jaguar and two classic Minis. A stalwart of the Norfolk Mini Owners Club for nearly a decade he is an enthusiast for all things Issigonis. A stickler for historical accuracy he has recently performed the marathon task of mining the online newspaper articles for all BMC>MG related stories. Ian is unable to help with technical queries – he pays other people to fix his cars!

69 Comments

  1. Great article Ian! What a mess…

    It’s interesting that BMW have effectively created a range of vehicles from the latest MINI platform, both larger MINIS and FWD (shock horror) BMWs, all of which they’ve done with little need for any British input. With the vast sales of the 3 and 5 series, it’s doubtful if they miss the sales of the 75 and any smaller Rover saloon either.

    They don’t need Land Rover, as they sell plenty of SUVs themselves and don’t need the ultimate mudplugging capability of LR products either. But at the same time, LR are a massive success, and can do things that BMW can’t, and that is provide something that doesn’t look like a BMW, and has a completely different feel, which sells at a premium price. Moreover, the upcoming Jaguar F-Pace, something they can only do because of being part of JLR is a REAL BMW basher.

  2. A few short remarks on this scholarly tome.

    The Zephyr-Zodiac Mark 4 was an easy car to steal sales from. The enormous bonnet gave it poor packaging, the awful rear suspension gave legendary lift-off oversteer, and the (underpowered) V4 made the K series look reliable. The “Sweeney” era Consul-Granada range was vastly better, but Ford gave Rover Triumph a window of opportunity, the Mark 4’s selling at half the rate of the “Z car” Mark 3’s.

    The P6 also made the Vauxhall Cresta PC and Humber Hawk/Super Snipe look old-fashioned, clumsy to drive, and thirsty. Neither range was directly replaced. The Vauxhall Viceroy and Chrysler 180 missed the mark by a mile.

    The P6B made an excellent police car.

    SD1’s had problems with brakes, PAS, synchromesh, and an unfortunate tendency to swop ends under heavy braking. A very sexy car, especially with a V8 engine and five on the floor, but not a good buy either new or secondhand.

    The Rover 75 depended for sales success on Rover having a reputation as a prestige car maker. BP describing them in a press conference as a basket case scuppered that. Ironically, its slow sales prevented over-exposure of its unusual styling, enabling it to sell steadily until 2005.

    The 75 may have had a high parts cost, but was a very “lean” car – they could build one to order in ten days. It took longer at that time to make a mattress for a single bed!

    Alchemy’s finance model was flawed; they did not understand R&D costs in the motor industry.

    Honda probably underestimated how much Rover helped them, not only providing a JV partner to launch the Legend – and hence the Acura marque – but also in understanding European tastes. Having owned an R8 216, I have great respect for their engineering skills; but I don’t see as many new Hondas in the UK as I used to. They do well with the CR-V, which started out looking very much like a Freelander.

    • The old fella was into the Sweeney etc. back in the day, and preferred Cortinas and Granadas over BL products.

      I don’t think BL grasped the concept of product placement and filming continuity, I’ve heard horror stories of vehicles arriving in a different colour to the previous day etc. You’d think after the Italian Job (in which the Minis had to be bought from BMC, whereas Fiat fell over themselves supplying free cars) they’d have learnt a valuable lesson.

      As for Honda’s lessons from Rover – I had a big Accord coupe much like Richard from this sites’. The interior was a lovely place to be, soft seats, leather, fake wood, I would like to think that it was at least inspired by Rover.

  3. Fascinating article. A couple of small things regarding the R8 though: they were never fitted with the 1.1 K-Series and the rest of the petrols weren’t all 16 valve either. The early 214S (only R8 with a carb) and later 214i models had the 8 valve K1.4.

    Sorry to be picky but I do still admire the R8.

  4. I think your point that both BMW and Ford overestimated the market for retro-styled British saloons is a valid one. Jaguar has now upset the purists, but has sold more cars.

    Retro seems to work very well in what is, to be honest, the female market. The MINI and the Fiat 500 are cute. The Jaguar X-Type, S-Type and Rover 75 were not cute and the target male driver would not want to be cute. He wants top quality engineering with unadventurous styling that is a status symbol.

    Benz styling is conservative to verging on retro, but the heritage, dating back to inventing the motor car, means that it appeals to business men and taxi drivers alike.

  5. Had BMW allowed Rover to delve into the BMW parts bin, used BMW platforms adapted for front wheel drive and allowed Rover to carry on as before there might have been a gradual increase in sales. Instead BMW threw ludicrous ammounts of cash into Rover and expected instant results.

  6. An interesting article.. but although the loss of MGR in 2005 was a shock, in retrospect it probably wouldn’t have survived the aftermath of the 2008 financial crisis anyway. To some extent, all the efforts to try to save MGR were a bit like trying to rearrange the deckchairs on the Titanic.

    But on the flipside, both JLR and MINI are selling well, and indeed car manufacturing in the UK is generally in decent shape. So, it’s not all bad.

    I think the blip on the horizon for me is MINI. It’s a fine car, but basically it is a fashion accessory. I’d love for BMW to revive the Triumph marque with a proper low-cost roadster.. somebody somewhere in BMW must surely have had plans for something when they retained the marque after the rest were transferred to MGR?

  7. Reference Nissan K11 defection of BL Rover customers, I was one, the Nissan K11 16V car was a delightful car, I wish I still had mine, great engine, quiet with good road manners, fun to drive, and superb reliability. I stripped a nearly new K11 for spares, the car was a stolen insurance right-off, in the strip[ down it became apparent the K11 was so obviously designed for ease of assembly, in fact a team of children could have assembled a K11 without error. Nissan Sunderland were lauded for their productivity, 100 cars per employee per annum, with very low defects and warranty claims. Hats off to the Japanese and British workforce!
    ps, all those spares from the right off, with K11 reliability, none required!

  8. Dynamoo, I’m afraid the trouble with BMW was that the right hand never knew what the left middle hand was doing. Some BMW guys were keen to build Austin Healeys, Rileys, and Triumphs; others wanted nothing to do with their British investment. Some of those engineers and managers who were posted to the UK may have been in the latter group, if they were made offers they couldn’t refuse!

  9. I think the 75 filled a niche (large 4 door saloon) that was soon dying on its feet – certainly the original marketing predictions were dramatically reduced soon after launch. Even so, it has lasted better than the S type and the Nanjing/SAIC duplication wasted a lot of time and effort where its assembly/sale in the UK should have continued as a customer/dealer retention exercise.

    I don’t buy the relationship between R17 and Freelander (not an executive vehicle)- Discovery led the market for SUV’s (40% UK market share at one point) but maybe Discovery 2 was too much more of the same thing and Disco 3/4 too much of a big lumbering Hector….

    I still think that certain parts of BMW bought Rover/Land Rover to do a hatchet job on a competitor (as they did decades earlier with Goggomobil) but recognise what they have done in the UK with Mini, Hams Hall, etc. In part some bits of BMW were embarrassed by how much better their Rover equivalents proved to be, eg supplier quality, so there was a lot of political suppression. I like the point about Longbridge having capacity but arguably it should have been shut decades earlier since it was the root of the problem but too big a nettle to grasp.

    Honda only wanted Rover as a Trojan horse and it was Rover styling input that made the 600 successful (compared to the equivalent Accord) despite its common dull interior. Given the mess Honda currently seems to be in maybe it needed Rover’s styling, marketing and engineering flair more than it realised at the time? It was handled badly by the UK government and I think that angered/embarrassed the Japanese. They may have deliberately sold Rover a pup with the HHR based on the old Domani even though they also made the equivalent Civic in Swindon – be interested to see how production volumes between the two sites compared.

    The BAE takeover was a political offloading – they hadn’t much of a clue about car manufacture and benefited little from Rover’s design and manufacturing expertise.

    It would be interesting to see an article on how the Tata takeover led to the JLR resurgence after Ford considered them to be moribund, also how much DNA is shared between Land Rover and Ford SUV’s (especially US market) – the styling of some of them seems very similar….

    • “I still think that certain parts of BMW bought Rover/Land Rover to do a hatchet job on a competitor”

      I think that’s a bit unfair considering the support BMW gave to the Freelander, and the superb L322 Range Rover which they helped create. The boom in the SUV market has been with road orientated, performance SUVs, rather than the Landcruiser/Shogun mud pluggers, and the BMW influence helped make L322 a massive success, in production for 10 years

  10. It would probably have been better if Honda took over the company in 1994. Honda had saved Austin Rover in the eighties and Honda engined Rovers were always popular due to their reliability and smoothness. The 600 was the high water mark for Rover in their alliance with Honda, a good looking, well equipped and rewarding to drive car that combined Honda quality with traditional Rover values.
    Had the relationship continued, I reckon Rover would be around as an upmarket brand of Honda in the same way Lexus is to Toyota.

    • Acura is to Honda as Lexus is to Toyota, and the brand was launched with the Legend – a car that shared commonality with the ‘XX’ 800.

      At best, it would’ve been a European badge for imported Acura vehicles. However the unfortunate Chrysler-Lancia shambles shows that most people can see through such blatant badge engineering.

  11. I don’t buy that Longbridge should have been closed a long time ago. The factory might have been outdated but it could have been gutted and redeveloped. The alternative was to close Longbridge and find a new site with all the hassle of planning permission. BMW did plan to redevelop Longbridge before they pulled out.
    Longbridges vast space was a liability after the demise of the ADO16 in 1973/74, but the BMW MINI should have seen the return of serious volume production.

  12. First off.
    I have to say I like those type of 7 Series BMW’s in the photo.
    Such a really great design.
    Second off I believe I read something to the point that successive British Governments get tired of investing money in BL/Rover Group.
    And to me the British had a choice either invest in civil industry or the Military Industrial complex.
    They chose the latter and are the poorer because of it.IMO
    Whether it’s Rover cars or Vickers trains or Leyland commericals.
    They have had endless funds to pay for any number of “defence” products which have over promised /under delivered and overran their budgets. But consumer goods or civil industry must get it right every time. regardless of market cycles.
    “yous pays you money…….”

  13. Well the Rover 75 I owned from 2007 to 2010 was probably the best car I have ever owned in my life ! It took us all over Europe, including two trips to Rome to see my wife’s family. It performed almost faultlessly, far better than my current Jaguar saloon. Yes, it was retro, but when it came out this was all the rage. The external ‘bling’ and internal trim were perfection for me. It was a very sad day when Rover stopped making them, as I would probably be running around in another one as I write this. I have to say that mine was the 2.5 V6. Many owners of the 1.8 had the horrendous head gasket problems that were never sorted out until MG ROver went bust, and so too late. None of the bovinely stupid senior managers seemed to realise that the main quantity production engine that goes into ALL your cars has to almost perfect.

    The story is very sad, but we still do have a motor industry but no longer British owned, and production is far higher than in the “good old days”. Funny how similar this is to the Potteries where almost all the well-known names have have gone, but the “unknowns” Churchill, Dudson, and Steelite produce more than the old names every did.

    • I actually would like a Rover 75, a Cowley built car with the original spec, despite my criticism of the design.
      Fortunately I don’t suffer from CHPD, and was able to get a grip, as I already have enough cars.

  14. Er, I’m actively searching for a Cowley built 2.5 75 at present. Got to save one before they’re all gone and we’re only left with deseasel examples

  15. Interesting what some people are saying re Honda vs Rover. I own an R8 Rover (1.8 VVT Tomcat) and my wife has a previous model to the current Civic (56 plate 1.8 VTEC). Both have very similar milages (low 50k) and engines; 1.8 16v with variable valve timing. In every respect bar 1 the Rover is the superior car. Performance, acceleration through the gears (and the Honda has 6 of ’em), comfort, feeling on the road, steering, airiness and build quality. The Honda wins on NVH and possibly MPG.
    However it would have been interesting to see what Rover (or MG) could have made of it.
    My wife’s previous Civic (the boxy one) would never have made it as a Rover.

  16. The Rover 75 was a brave attempt to create a product so good, and so distinctive, that it would lead the market. Sounds far-fetched but BMW have a track record of doing this look at the emergence of the 02 in the 70s, the 2000 (predecssor of the 5-series), and the 1 series more recently – instant big sellers in market areas new to the company, resulting from massive speculative investment. The same trick has been pulled off with the MINI. I reckon that a showroom around 2002 containing MINIs, Range Rovers, Discoverys and 75s would be a very appealing place to be. I imagine the stillborn 55 would have been an excellent product too. The problem with the 75 was that it quickly became an orphan, and Pisch’s comments at it’s launched served to condemn the brand just when it should have been enthusiastically backed and reborn.

    I so wish BMW had continued to own Rover and kept their nerve because the subsequent success of the MINI and Land Rover products shows that they were on the right track. The 75 was an excellent, charismatic product (my V6 was the best car I’ve ever owned and did 25000 reliable miles in a year when it was 14 years old). Never mind the cramped interior – MINI has that too, and that sells because it has charisma.

  17. I always thought of Honda buying Rover would have been the best outcome. I had a 96 Accord company car which I enjoyed, but preferred the more upmarket image of the R600.

    Of course had the Austin brand survived, the SD3 / R8 would have been marketed as an Austin or Triumph… perhaps less prestigious than Rover? I agree that Rover could have been Honda’s premium brand, but remember they already had ACCURA as that in the US.

    • Great points about Acura.

      I was of the opinion that Rover could’ve been used as the ‘brand’ for Acura in Europe.

      Lexus – which 25+ years after introduction is still trying to make inroads in Europe, and the slow selling Infiniti brand show that even respected and established Japanese companies can struggle to make market share in the competitive premium market with new brandnames.

      Rover would’ve been a known established name, and the larger Hondas were great cars. Sadly it never came to pass, the Legend and EU Accord – which are sold as Acuras in the US, have been axed from Honda’s European markets.

      Of course, many enthusiasts would’ve been cynical of this approach – as seen when Chryslers were sold as Lancias (And vice versa for the Ypsilon and Delta in the UK), though Rover and Honda had a legacy of joint development, Honda in particular having learnt a great deal from Rover as to the qualities a European car should possess.

  18. ” what really did for Rover, was a gradual drift towards MPV/SUV/4X4 type vehicles by consumers.”

    ” What angers so many about the BAe sell off is that, when it happened, Rover actually started to come good.”

    – A very interesting read. I’ll have to find time to read it again, more slowly! Initially, though, the above two points stand out, have occurred to me before.

  19. Longbridge production for 1997 was 15.5% higher than that for 1994. Rover Cars production was slightly down overall because the Maestro and Montego were axed in 1994, which were sold as budget cars, and the Metro/100 went at the end of 1997.

  20. The 75 was an excellent car and I’m pleased to say I always see a couple locally in immaculate condition. It seems the people who own the big Rovers seem to look after them and like them. Also I reckon the quality on the 75 is better than the 800 and SD1 as very few of these seem to have survived to their 15th birthday.
    Also worthy of mention is the 600, which seem to have been equally durable and well made, there is a daily driver locally on a P plate. As a classic, some of these are over 20 years old now, they would make sense, being reliable, well made in Honda V6 or Turbo form can really motor.

  21. The end of Metro/100 production was a big blow. The ageing of the car was already losing the company a big market presence.

    I didn’t know royalty payments applied to ALL cars Honda had a PART in developing – even R3! I thought only 600, HHR would have attracted such ‘costs’.

    It wasn’t just that Rover had no SUV, MPV in its line up. The move of the market to this type of car was lessening the appeal of a Rover saloon.

    The strength of the pound was a lack of good fortune.

    A lot of negatives for BMW. However, given their investment already made, the success then made of MINI, I still think a successful range of MINI, R55, R75 was possible. There could have been MPV type derivatives. So, I think more effort should have been made to keep BMW at the helm.

  22. Ian,

    Wow, what a very comprehensive piece.

    I agree, BMW bottled it. It was very close though. Two factions did indeed develop within BMW, a set who were very arrogant (Reitzle and co) who thought it was all a waste of money and they knew better. . and the Pietschesreider camp, who knew that although things were tough, they should stick to their strategy.

    The strategy being that BMW knew that in 10 years (from the takeover point of Rover) they would need more volume and therefore some brands to help them fulfil this volume without diluting the core BMW brand.

    I have to say that I think there are people within BMW now that probably think it was a mistake to bail out and they should have stuck with it. Forget what idiot Moulton said about “you dont need Rover, you can do it all”, ultimately, BMW are and have diluted their brand.

    I don’t think it can be underplayed how much impact the UK government arsing around had at what was a time in the BMW board room where there was a lack of confidence. This really hurt them and was a big thing which made them chuck the toys out of the proverbial pram.

    I have been to almost every BMW plant – Munich, Regensberg, Dingolfing, Landschut. The scale of what they are doing and the capital investment for these things is breathtaking.

    The UK government (Byers holds a lot of responsibility for this mess IMO) brinkmanship is a big factor because it came at totally the wrong time.

    It is all a crying shame really. BMW now would probably be using the Rover brands a lot and we would likely have a diverse range of quality cars. It probably would have come good, but would have taken another 6 or 7 years for the ultimate breakeven, when Hams Hall came online and the old smaller Honda platforms were replaced with BMW Rovers.

  23. Ian,

    Also, BMW would have likely retained Longbridge.

    A lot of it would have been flattened, but there would be state of the art production facilities for MINI with the required capacity. As we know, they are “boxed in” at Cowley.

    In my opinion, this was another mistake and even when ditching Rover, they could have probably done better if they had kept Longbridge, sold a bulk of the land but continued and expanded a state of the art facility on the site.

    Hams Hall shows their commitment to the Rover project really. They would not have bothered creating such a facility if they were then having to export back to Germany such a high proportion of it’s output.

  24. Basically, it is all a crying shame and BMW got it pretty close, but yes, as you say, they bottled it.

    Somehow, it is a fitting end to what is a total industrial tragedy when you review the previous 30 years.

    So near yet so far. I was a huge fan of Rover under Graham Day and there really was some genius things done which gave a lot of hope, but when you review the hard facts, in the big scheme of things, without a huge amount of investment over a 15 year period, it was always going to be a flash in the pan. The business was suffering from chronic underinvestment for decades.

    Another criticism I have of BMW is that they did not get stuck in 5 years before they really did.

    They realised far, far too late what they actually had on their hands with Rover. If they had stepped in earlier, some of the UK “geniuses” and they were, could have been empowered much sooner.

  25. Hi Ian,

    I think you may have me mixed up with someone else of the same name.

    I have never worked for any ARG company.

    Always look forward to your own articles though from a real ‘insiders’ view.

    John

  26. The sad thing about this article is its conclusion is spot on – BMW bottled big style. But it’s sad because had BMW preservered, it’s very likely Rover – in some form – would still be here. VW have proved that you can successfully segregate the market – you need only look at Skoda/Seat/VW/Audi to show that it works. All appeal to slightly different markets and segments. Had BMW managed the situation better it could have had something similar. MINI being the entry level brand, appealing to young aspirational buyers, MG appealing to those looking for something sporty at a lower cost, Rover – appealing to an older buyer who wants something classy, BMW the premium brand for those who are getting there, Land Rover, catering to the growing leisure market of 4×4 and SUV’s with Range Rover the luxury brand sitting below Rolls Royce. You could share platforms and costs, and successfully appeal to all sizes and different customers. It’s almost as though if BMW learned one thing from Rover it was the company’s historical record of snatching defeat from the jaws of victory and thought anything the British can do, we can do it better and with style…..

    You get the impression that BMW bought Rover, didn’t realise what it had bought and then suddenly didn’t know what to do with it. At the moment it bought it, Rover – whilst not riding the crest of a wave – was doing ok and bumbling along. Yes it was welded to Honda to some extent but that’s not unusual – Skoda and Seat were building on old platforms, some of which were shared with other manufacturers. Surely a priority would have been to design a new range of cars to replace the 400/600, both of which were tied into relatively new Honda designs – these were mid-range cars, the important mass sellers. The new 200 had no such royalty payments and could have carried on till an adapted MINI platform was designed for its replacement. But no, it decided to replace the 600/800 first and then saddled the whole car with an image of what it thought was “Britishness”. It pumped millions into Rover and expected instant results despite the car market going through one of its downward cycles. Then at the first chance it bailed out and left Rover torpedoed below the waterline…..

    I’m not saying Rover is blameless here and neither is the Government while I’m at it. Neither can it be said is the car-buying public totally without fault. I say that because our European neighbours seem to be more loyal to their national manufacturers. It’s pointless saying how tragic it is that Rover has gone when no one was buying the cars at the time they could. But what I’ve always found odd is how little criticsm BMW gets over the Rover debacle. It’s always around how Rover almost brought down the mighty BMW when actually BMW was more to blame. The irony is, that had Rover stayed with Honda and Honda taken eventual control, it would be here.

  27. Thanks Scott
    I like your point that BMW didn’t seem to know what they were doing.
    The Lorenz and Brady book is to blame for distorting the publics perception of what went wrong. I bet they drive foreign cars.
    The last time I went to Birmingham in 2009, everybody seemed to be driving German cars. So much for community spirit.

  28. I am glad you make reference to the book by Lorenz and Brady as that final chapter looking at the MG Rover Group era was actually rushed and badly researched and did little to recognise some of the efforts MG Rover Group’s management and employees did to survive and find alternative life-saving link-ups with other manufacturers. Then again, the publication date of that book should highlights this. The same with an article written by economists at Cambridge University which was published at the same time and is full of tiny errors. Again, it seems to suggest that they had not done their research properly.

    While there is a consensus that BMW had “bottled it”, we also need to consider the deeper picture of why. Could the management have ultimately been under too much pressure from the shareholders who wanted results fast? This will sound harsh, but shareholders are ultimately greedy in that they want results delivered within what in a business world is often an unrealistic time frame. Shareholders will often sell on their shares if they do not get fast and ‘acceptable’ returns on their investment rather than being in it for the long haul, and if there is a ready trading of shares on the stock market, this can potentially reduce the value of the company, make loan lenders uneasy and also make the company itself prone to receiving ‘unwelcome’ new shareholders in the form of other companies. It all links in with behaviour economics and there is a need to look at the shareholder – both private and corporate – at an individual level. Digressing slightly, I am sure that with the recent ‘diesel-gate’ scandal involving several companies, economists will be studying its potential impact on shareholders’ trading behaviour with interest.

    The Volkswagen brand management model is probably the most successful ever and is the one even a rival such as BMW should have studied. As the television series when “BMW met Rover” seemed to highlight, BMW went to extraordinary lengths to try and understand the brand values of Rover. Admittedly the Rover brand had been somewhat diluted by strategies relating to some of the models based on highly restrictive licencing agreements (e.g. HHR) or re-engineering old designs and having a Rover badged model in a less than ideal market sector (i.e. supermini sector) for the brand itself. However, it seems that in this quest to try and establish what the brand values were, BMW decided it had to remove any aspect that potentially overlapped with that of the BMW brand itself. This ultimately created too many restrictions on potential opportunities for what the Rover brand could represent and ultimately deliver to its customer base. The same approach sadly also continued with the Rover and MG brands under MG Rover Group. At such a deep level of analysis of what a Rover is (and should be, or should not be), was it a case of BMW not being able to “see the wood for the trees”? It certainly came across like that.

    As the Volkswagen multi-brand strategy shows, there can be overlap in quite a few brand values and strategies. If someone prefers either the brand values, pricing and spec of a Skoda or Seat to that of a Volkswagen or Audi, Volkswagen Audi Group still benefits. They haven’t lost sales to an external competitor but instead are still producing a car using group-derived components, suppliers and manufacturing capital which means at a group-level they are still enjoying efficiency.

    Sadly, another problem was that much of BMW’s technology was designed for a rear-wheel drive, longitudinal configuration which is of course the complete opposite to that of all Rover models of that era. The expectancy to share such technology across the two companies in volume form was clearly not going to be achievable in the short or medium term and would have required existing Rover designs to have been either extensively re-engineered, which would have been costly (and possibly unrealistic for those models covered by a licensing agreement with Honda), or ultimately replaced. There was no cheap, easy or quick way to address this desire by BMW. Again, perhaps this was another unrealistic time-based expectation to improve both companies’ economies of scale?

    I believe if BMW Group had kept the Rover Group in its entirety or just the Land Rover division we would not have seen the development of a Range Rover Sport, as BMW would have seen it as a direct rival to the BMW X5. As history has subsequently shown, the Range Rover Sport quickly became one of Land Rover’s best selling (and most profitable) models which has helped to transform their fortunes.

  29. Good analysis David
    I suspect by your user name that you may be a P6 or SD1 owner?
    When Jaguar tried to make a smaller model using a Mondeo floorpan, it was widely ridiculed. The same happened when Saab used massed produced GM floorpans. Audi used a VW Passatt floorpan for the A series of cars, and it sells.
    The power of the German brands seems omnipotent.

    • Ian,
      for un-imaginable reasons Audi still uses its own platforms for cars from A4 up which share virtually nothing with VW. For a short time the VW Passat (first and 4th generation) used Audi platforms, but the Passat returned to use a VW setup now (the same the Golf uses). In todays world this looks like a commercial luxury – and I am not sure how long this will continue – see BMW and Mini platforms merging right now.

  30. @ David3500

    Logged on, saw your name in ‘Recent Comments’ and thought ‘I’ll have to read that!’

    An interesting read, argument. I think you’re very right. BMW trying to avoid ANY overlap with the Rover brand was pretty harmful, denied Rover a lot of opportunities.
    Before BMW bought Rover its recent sales success was partly due to Rover marketing itself as a bit of a British BMW. Rover had succeeded in being perceived as a cut above volume manufactures – especially R8 compared to Escort, Astra. Rover had an image of quality with often a mildly sporty flavour (R8 GTI, for example). This image was treading on the toes of BMW. The model numbering alone was a sure sign of Rover’s marketing tactics.
    BMW’s acquisition ended all this and Rover was then marketed as British ‘olde world’. Gone was the idea of replacing cars such as the 420 GTI which more appealed to the BMW customer. This meant the loss of sales achieved in the early nineties.
    … and not to exploit MG. Did you not realise, BMW, the strength of this brand?!

  31. No, I sadly do not own either a P6 or an SD1 – although I will be happy accept my dream car of the 1987 E registered SD1 Vitesse twin-plenum finished in Black from someone looking to offload one for free to a committed enthusiast!

    The 3500 merely indicates my enthusiasm for a particular marque (although I do like other marques as well) and a wonderful engine which, after the sound of laughter, is the next best sound you’ll ever hear in life.

  32. I have read this with interest, because it seemed to me that the whole BMW fiasco resulted from the fact that the acquisition came about because of Pischetsrieder’s enthusiasm , and when he fell out with the Quandt family and left, so the enthusiasm at Munich for Rover vanished into thin air . This was, apart from Glas , BMW’s first foray into acquisition , and I have a feeling that they ( the Quandts in particular) having been seen coming by BAe , suddenly woke up to the fact ( as Ford did with Jaguar) that cash was flowing out far faster than it could be generated by the existing operations , and that there was no realistic prospect of this being reversed in the foreseeable future. I haven’t seen BMW’s accounts , but what does tend to be overlooked is that until the late 1980s/early 1990s it was a relatively small and undercapitalised operation. It was the profits from the successes of the 80s and 90s which underpinned its expansion , and the risk of reversal of this was just too great to take

  33. Also remember that German accounting standards are different to those for the UK. For example, whereas UK companies look to amortise their investment in a new product over a 3 – 5 year accounting period, in Germany, there is an expectancy that investment is amortised in the first accounting year.

    Therefore, when there were reports of Rover Group’s losses in the media in early 2000 they did not consider that nearly all of that ‘debt’ related to the £700 million investment in the Rover 75 which only entered production in 1999 and went on sale from June of that year, together with the heavy investment in the new Land Rover Discovery Series II with new TD5 engine which went on sale from September 1998.

    Perhaps this was something BMW and its shareholders were not comfortable with, or accepting of.

  34. This is a very interesting Essay… One of the things that startled me was that Honda still held Rover to Ransom over loyalties with the R3, What exactly had Rover bought in the joint venture to produce its predecessor the R8 which this model shared part of its platform with? Little wonder Rover’s Bean Counters tried their hardest to reduce costs elsewhere.

    Was every Joint venture merely a case of Rover leaving a Deposit, but still puts in al its Time and money Developing the new product only for The stronger Partner to demand it Their way or nothing, and then to add insult hold all the rights to everything that both partners worked on but charged the underdogs handsomely on every venture? Leaving very little funds for Rover to develop anything for itself. I think I mentioned it before on another Essay, That I cant help think that Honda literally took the P”ss out of Rover, making themselves “a nice little earner” but Destroying Rover in the process making them more and more dependant on them. The story almost has a Disney feel to it, complete with wicked Step Mother’s.

    Most assume BMW were the villains in the saga but I cannot help but put Honda in the same league. And little wonder why The Germans looking at the situation thought “How do we get out of this?” and as mentioned in other posts “Bottled it” . Having said that would another Manufacturer have done the same?

    Until the cost factors are released it is a difficult opinion to change. One still wonders if The available funds for The 800 could have been spent giving The SD1 a new set of clothes? and spending time on the quality front. (There are plenty of stories about BMW Engines going Bang along with Mercedes and Audi, But BL/Austin-Rover still got the worst of them), Could that car have been the one to have saved the group? Or did they have to jump into bed with another Manufacturer just to prolong the inevitable.

  35. Go back 45 years and unless you were lucky enough to be able to, or your employer was, to afford a Jaguar XJ, the vast majority of upper middle class car buyers were more than happy to buy a new Rover or Triumph. German cars were still very rare and expensive then, and the products of Rover and Triumph were extremely competent, well equipped and durable cars. The SD1, and probably later Jaguars, destroyed this reputation, as people who were loyal Rover men soon became tired of the quality issues, unreliability and late deliveries through strikes of late seventies Rovers. Rover never really recovered from this.

  36. Very interesting! Like the classic stages of a project, what started out with bravado and enthusiasm on the part of BMW ended in panic and fear. You have to think that both extremes were unjustified.

    I can remember being gobsmacked on learning that the 75 was going to be an open chequebook FWD car. When you had access to world class RWD platforms from BMW this Rover FWD “brand value” seemed an expensive luxury, for an executive car at least. Maybe the 75 wasn’t retro enough! Personally I was always confused by the retro styling [which I loved!] and FWD. But the main point was the sheer waste of money.

    At the end, on the other hand, BMW were actually paying hundreds of millions to give away the Longbridge factory! Despite the myopic provocation offered by the British Government, with the 55 developed and ready for production, you’d have to think BMW should have doubled down at this point. Even if the 55 was just a middling success, their investment would have left them with a new factory they could have put to good use.

  37. Excellent post Jeff.

    I agree that BMW should have doubled down but the four cylinder building vostand, supervisory board and paymasters (Quandts) were all very nervous.

    Two factions developed, Reitzle V Pietschesreider. This infighting and panic as you say crippled their rational decision making processes.

    I would imagine they must regret the decision.

    I think Pietschesreider was already on thin ice and the UK government brinkmanship pretty much broke his and his camps neck because it reinforced the view in the Reitzle camp that the “English patient” was a waste of time, they were pumping money into a lost cause, it would not turn round and the UK generally were not supporting or appreciating their efforts.

    All in all, a huge muck up and massive missed opportunity.

  38. @ Jeff Morris

    Yes, I’ve often wondered why the 75 was not based on a rwd BMW platform – like you say, a huge cost saving and I think rwd would have better suited the retro theme.

    I’m always surprised that BMW pulled out when they did. With 75, MINI and the 55 ready for production they were almost there. Agreed – you would have expected BMW to “double down” and await the rewards of their investment.

  39. By the time BMW pulled out in 2000, Rover was down to about 6 per cent of the market. Buyers just weren’t interested in their mid range offerings and they didn’t have a supermini since 1997. The 75 and the Land Rover side were all that were viable really, and attention should have been focussed on these, with a smaller Rover based around Solihull( where Rover saloons were produced until 1981) and producing 4wds and premium cars the market wanted. I daresay a continually improved 75 could have been a very desirable car as the original waa one of the best in its class.

  40. Glenn – Yes, the mid range market share was falling fast. This faster than expected fall is doubtless a big part of BMW’s decision to pull out. However, with 55 ready for production and MINI covering part of the supermini market the question still stands – “Why did BMW not just ‘double down’ and wait for the full new model range to reach the market?”. So near and yet so far from a new era, successful Rover.

  41. Regarding Project R30, the Rover ’55’, just how ready was it?

    After all, the widely rumored envisaged launch date for R30 of 2002 was over two years away. With the gestation period for the Rover 75 being nearly four years (or thereabouts) before it was unveiled, this would suggest that R30 still had some way to go before it had received sign-off as a production ready model. When this happens there is usually the bulk of the expenditure on assembly equipment and technology, body pressings, trim, etc. In other words, the bulk of the project’s overall expenditure budget usually occurs within eighteen months of its launch. This would suggest that the bulk of the R30’s envisaged expenditure programme had not been realised by the time BMW Group announced in March 2000 its intention to sell off Rover Cars and Land Rover.

    Therefore the new owners of Rover Cars and the R30 project would be expected to dig deep into their pockets in order to get it to the stage whereby it was rolling down an assembly line…

  42. There is an R30 article on this site. Perhaps editor Keith could put a link at the ‘you could also look at’ section?

  43. @ Dave Dawson, BMW could have rationalised the range by ditching the 200 and 400 and concentrating on Mini, the 75 and Land Rover. They’d have covered three very successful bases, supermini, SUV and premium, and probably would have done well and, of course, the Rover name would have lived on. Obviously there would be casualties, I could see Longbridge going in favour of Cowley and Solihull, but the smaller company would have fared better.

  44. @ David 3500, @ Glenn Aylett – See your points –

    So, R30 was not quite so “near production”. Certainly not in cost terms.
    Could more effort not have been made to push 25 and 45 in the meantime? A big part of their falling popularity was the move towards SUV. Could BMW not have tried some derivatives with more of an SUV theme? Their own Streetwise, for example.
    Could they not have concentrated on, sold harder in, the “three successful bases they’d have covered” pending the launch of a Rover 55?

    It’s all speculation I know. However, I still can’t rid my mind of the thought “Why? So near, yet so far….”

  45. @ Dave Dawson, the 25 and 45 didn’t really fit into either the B or the C segment, a problem which afflicted earlier models such as the Marina, and no one really knew what to make of them. The 25 was priced like a Golf, but was supposed to be a Polo rival, and the 45 didn’t know whether it was aimed at the C or D segment. Also the cars were ageing and losing sales, so it would have been better just to cull them in 2000, or axe them in 2001 to make way for the Mini, and concentrate on the supermini and premium market.

  46. There was a big advertising campaign for Rover 25 and 45 together with a phased introduction of some variants of the 45 line-up (i.e. the 2-litre V6 model which arrived in June 2000 due to some final sign-off work involving the creation of a raised number plate plinth, to enhance frontal cooling requirements, and an additional front bib spoiler). This campaign involved involved a new advertising company and focused on a European-wide strategy.

    However, just three months after the Rover 25 had officially gone on sale, BMW Group announced their plans to dispose of the Rover Cars division and Land Rover. Had this not happened then perhaps there would have been a stronger push for both models. Sadly we will never know this.

    However, as the press release dated 19th October 1999 highlighted, pricing for both the 25 and 45 was more aggressively aligned in the supermini and C segment respectively. Early press reports of these models were certainly encouraging.

  47. Just at launch time of 25 and 45 I can remember thinking the range looked rather good. I knew these smaller models were getting on a bit but the 75 treatment enhanced their appeal pending an all new model. The ranger looked pretty cohesive. Of course, this was before news of BMW’s plans for Rover broke…

  48. I’ve got a wide range of road test articles of the 25 and 45 . The 25 in particular received lots of praise and fared well against the competition in group tests . The 45 received praise for being an improvement on the 400 and for the way it drove when compared to less dynamically cars like the mk4 Golf . The ‘dated’ interior and switchgear was one of the main crititisms from the reviews I have read. It never toppled the likes of the new Astra or Focus , however the 45 was certainly competitive against the likes of the 306 ,Megane , Almera and Xsara , all of which dated back to the early/mid 1990s .

  49. @ Craig mgr

    Having driven an MG ZR 105 since early July 2012, I can well understand the Rover 25 receiving praise back in the early 2000s.
    Regarding the 45 – I don’t think I ever saw one of the Peter Stevens facelift models on the road before MGR went under, April 2005. These looked more modern and the revised dash could not be criticised for dated switchgear. I think the rise of the SUV was its biggest problem

  50. I have just had a thought! BMC were slated for getting parts for the original Mini from as far afield as Llanelli in Wales.
    BMW got their engines for their first generation Mini from Brazil!

  51. It has just dawned on me that the more successful Rover were in selling cars, as in 1997, the more money they lost because of royalty payments to Honda!
    The insanity of the situation is that if Rover had been able to shift 1 million cars a year, then they would have bankrupted BMW.

  52. I think it’s easy to over simplify this whole ‘retro styling’ issue of the 75. There is a lot of criticism aimed at the 75 to the point where some ‘blame’ the failure of the company (at whichever stage of development you choose to settle on – BMW ownership or Pheonix) on the 75.
    Simarlarly, it has been said that the S and X Jaguars ‘failed’ due to their ‘retro’ styling but but even Sir John Egan had to admit through gritted teeth (at a Brooklands Talk) that they did sell quite well. Let’s face it, there is thousands of the things still running around – just like the 75.
    Things in our company car park in 2004? Very modern up to the minute styled cars? Citroen Xsara Pecaso, Volvo S80 and Ford Mondeo – but more 75’s on the road now than any of them I should think. Perhaps I just notice 75’s ‘cos I’d be driving one!
    My other thought is, when is ‘retro’ not ‘retro’? If ‘retro’ means styling something with a hint of history, a flavour of the past – then surely the current Audi A4 is ‘retro’ – it’s the same warmed up ‘bland and mundane’ stuff developed over a very long time. Even the latest Golf (a car which it is apparently some kind of heracy to critique in any way) now looks like a 20 year old Nissan (at least from the back) – it can’t manage to do anything ‘new’. If it’s not ‘new’ – is it ‘retro’?

  53. Accusing BMW of not exploiting Rover’s/MG’s values is a bit unfair. In his home country, Bernd Pischetsrieder was under attack for wearing rose tinted spectacles when looking at BMW’s British assets. He repeatedly told the German press that he considered to revive the Austin Healey and even Riley brands and the press argued that this was mainly because of his family links with Alec Issigonis and him (Mr. Pischetsrieder) being a confessing anglophile.
    Remember that in the late Eighties to early Nineties Rover’s brand value was at the rock bottom. Image-wise, Rover competed with the likes of Lada, (pre-VW) Skoda or Subaru, which were sold by similar backyard dealers.
    Look at the time and money it took VW to get Audi where it is today and you get an idea of how much it would have cost BMW to return Rover to its former glory.
    In the end, BMW burnt 8.000.000.000 Deutschmarks during its Rover ownership, so there’s no real reason to accuse BMW of under investing.
    And yes, BMW surely would not have funded development of 3 and 5 series competitors, but the 75 was meant to make a dent in the Mercedes C-class sales numbers anyway and not to cannibalise BMW’s own sales.

    I also do not agree that it was the 75’s styling that killed it nor was it the restricted back seat space. A contemporary C-class or 3 series is even more cramped in the back and that did not do their sales numbers any harm.
    Initially, the 75 got very favourable press comments for its styling, particularly its interior.
    To my eyes, the 75 was killed by other factors like its choice of engines. Nobody in their right mind would have bought such a car with the terribly unreliable K-series four and that is even before you take into account that the four pot 75 was slow when compared to its competitors.
    In addition the 75’s trim options were badly chosen and had vastly exaggerated prices. The single most important indication of Britishness, leather seats, were not available as an option. In order to get them you had to order the top Celeste trim level which was frighteningly expensive. The 75 was priced on a par with BMW or Audi products which absolutely made no sense when you tried to sell the car from backyard premises and when it came from a manufacturer seen as permanently being on the brink of bankruptcy.
    It’s interesting to compare the launch of the Alfa 156 just a year before the 75. Alfa was a much stronger brand with a loyal enthusiast following just waiting for a proper product. And the 156 was a quite good car, not just for Alfa but also on absolute terms. And even then, Alfa sold the 156 at extremely competitive prices at least ten percent below BMW and Audi levels.
    For the price of a bare bone BMW 318 with 115 PS you could get an Alfa 156 1.8 with 144 PS with leather seats, air con and performance levels close to a 320.
    In comparison, a Rover 75 V6 Celeste cost nearly BMW 323 money and gave you close to 318 performance.
    Small wonder it didn’t sell.

    • I would have said the late 1980s early 1990s were Rover’s high point.

      As for Audi about 10 years after VW took over they memory of the 2 strokes had been more or less wiped out & they current models were sitting nicely on top of VW’s range.

      • In the Seventies, Audi saw themselves at half a rung above Opel and a full rung below BMW. That was the time of the Audi 100 Type 43 designed in their folded paper department. The upmarket aspirations showed more in trim options of dubious taste (green steering wheels, Vasarely inspired psychedelic seat patterns and light brown chrome trim with US type headlamps, anyone?) than in true quality of their products. The Blitzkrieg attack on the rallye world didn’t help much because the actual products were over ambitious and half hearted. VW at that time simply didn’t have the money to fund the necessary products like proper six pot engines. Only around the time they changed their model designations to paper sizes did Audi become an accepted BMW competitor and even then the first A8 was not seen on the same level as a 7 series or S class, despite its techno raid of aluminium and all wheel drive.
        BMW needed about twenty years to fight Mercedes on eye level. This was only possible because BMW basically is a family owned business and as long as the Quandts are happy BMW needn’t worry about their future.
        Just imagine how much of the Quandt family’s money would have been needed to resurrect Rover.

  54. Its easy to suggest that BMW bottled it and pulled out of Rover too early, but cast your mind back to 2000. Rover was haemorrhaging money and dragging the whole of BMW group down with it. There was talk of hostile takeovers. A situation that the Quandt family and the German government couldn’t have tolerated. When the 75 failed in the market that was the last straw. Still in the dark days of 2000 nobody could have imagined just how successful the MINI would be or how well Land Rover would do outside BMW and Ford. From a British Motor industry perspective, the only real casualty was the Longbridge plant.

    • ……….And I would suggest that the transformation of Halewood, the huge expansion of assembly facilities at Solihull, BMW Hams Hall and the I4 Engine Plant at Wolverhampton more than make up for that.

  55. One piece of BMW that lived on to the end of MG Rover were the diesel engines that were fitted to Rover 75s and MG ZTs. Apparently they were kept on as it was too expensive for Rover to develop a new engine and BMW diesels were known for their refinement and power.

  56. A fascinating read! Thank you. However, I think you underestimate the problem of under investment in UK engineering which was chronic.

    British large scale engineering (the manufacture of vehicles ships planes etc) suffered from chronic under investment. UK govt became paymaster – not banks because of the divorce of finance and manufacturing that happened in the 1930s. The government became the first last and only resort for finance for the engineering sector.

    This was a disaster because projects – particularly military, aviation and automotive projects – were underfunded and often had unrealistic goals given the limited investment permitted. There were frequent cancellations of promising vehicle, military and aviation projects which destroyed design teams and caused skilled people to immigrate leading to cyniscism and disaffection at all levels of the companies involved.

    Both management and workers suffered the paralysis of cynicism, in workers it was expressed in militancy, in management it was expressed in pessimism and an aversion to risk. Government ‘help’ for these industries actually led to short term solutions seeking quick profits and a “take the money and run attitude” most clearly expressed by the Phoenix consortium.

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