Blog : 20 years ago – when BMW bought Rover


I know it sounds a little bit sad, but I remember exactly where I was when I heard the news. I was on a break at work, in the rest room, buying a can from the vending machine. In the background the television was on – it was the 6.00pm news on BBC1, 31 January 1994, and I heard the words over the dramatic title music: ‘BMW has bought Rover for £800m.’

I remember it vividly and I also recall my reaction. I was shocked, upset, felt betrayed and saw it as the end of the British car industry – ironic, I guess, as I had recently ended a long line of British cars and was then currently driving a French saloon. I may even have let out a dejected, ‘oh bollocks!’

Can of Coke in hand, I sat down on the dusty seat in front of the 22in Toshiba and took in the details. Bernd Pischetsrieder was interviewed in a green space in London, along with senior Rover executives. All were bullish for the future beyond British Aerospace. Rover would bring market share and front- and four-wheel drive expertise to the arrangement, while BMW would bring money, global presence and development resources to our home firm. It all sounded great, of course, even if it meant that ownership would be leaving the UK.

Where did that leave Honda, though? Yes, that future relationship was over and the Japanese were seen to lose face but, in the coming weeks, a deal was struck that at least ensured that the Joint Venture Anglo-Japanese cars would continue into the future. Who’d have thought at the time that the upcoming 400 would continue for a further decade in lightly revised form. For BMW, the merger was great news – it wanted to expand in order to prosper in the after-effects of the 1990s recession and growth by engulfing Rover seemed to make sense at the time.

For British Aerospace, the deal was manna from heaven. It had bought Rover in 1988 for £150m, invested very little in it during its five-year stewardship, asset-stripped Cowley, cancelled model programmes and forced management to lean increasingly heavily on Honda. Five years later – almost to the day – it pocketed £800m for the company. Not bad… Mind you, during this time and despite all that, Rover was doing very well indeed at flattering to deceive – producing what looked to be a highly appealing model range going into the 1990s.


Appealing enough to catch BMW’s corporate eye, anyway.

At the time of the deal, Volker Doppelfeld, BMW’s Chief Financial Officer, said ‘Just to develop and build a new model in BMW’s existing range would have cost more than £800m paid for taking over Rover.’ A bargain all round, then. BMW was particularly interested in both ends of the Rover range – the off-roaders and the small cars. With Rover, BMW could fight the mass-market manufacturers head-on.

Industry watchers were surprised by the move – it had always been assumed that Rover and Honda would move closer together and, given time, for better or worse, this may have been the case. Honda wanted that. Rover wanted that. However, the British company’s overlords weren’t in it for the long game – and sold out.

Initially, from an outsider’s perspective, it looked like the deal could work. The combination of Rover’s design talent and BMW’s engineering nous should have been unbeatable. Finance and a light managerial touch from Munich should have seen the Brits just get on and create world-beating cars. That did, in a way, happen – during the six-year period with the German company in charge, the Rover 75 was launched (and torpedoed by the Pischetsrieder when the wraps came off at the Birmingham Motor Show – below) and both the MINI and Range Rover were in the final stages of development.

The Freelander, MGF and 200/400 were already in the pipeline when BMW arrived on the scene. Many worthwhile improvements were also made across the range during this time, such as the brilliant Land Rover Discovery Series II and its excellent TD5 engine.

However, during 1999 and on the back of falling sales of the Rover range, BMW’s controlling Quandt family bowed to pressure from the financial markets. It forced the board to downgrade its Rover ambitions and accepted the consequent resignation of Bernd Pischetsrieder. Months later, it sold Land Rover to Ford and the rest of the range to the Phoenix Four, while keeping MINI for itself.

Another chapter was over – and the saga was winding down.

A lot has been written here about BMW’s controversial stewardship of Rover – the sales losses and euro/sterling inequality may have caused Rover pain (it had moved 40 per cent in sterling’s favour between 1994 and 2000), but equally it meant mega-profits on all of those BMWs sold here. A lot was riding on BMW’s planned strategic alliance with Chrysler for Rover – so, when Mercedes-Benz swooped in to form the equally ill-fated DaimlerChrysler, it must have felt like it really was stuck with Rover, not quite knowing quite what to do with it. BMW’s supplier cost and logistics base in the UK was also proving troublesome and costly for Munich.

The other problem was that the long-term plan for Rover, which would see the company offering the MINI, R30 hatch (and derivatives), 75, MG sports cars and Land Rovers could have worked given more time, money and resources. Unfortunately, these product plans had been too long coming and were way too far from completion – and, for the financial markets, that was never going to wash. Game over…

So was I right to have been shocked and dismayed at the news back in 1994 – TWENTY years ago? It would seem so. BMW failed point blank to capitalise on this wonderful opportunity and we were left with a legacy of failure in Birmingham that the UK motor industry, thanks to an emergent JLR, is only now really emerging from. That said, I’m not a conspiracy theorist who believes BMW bought Rover to steal its 4×4 technology and the MINI, as so many here are – I know people within the company who still care deeply about British cars – it’s just how it outwardly appears to be.

Do I also blame BMW for the death of Rover? Not at all – I think it was a misguided, and ultimately well-intentioned, guardian in this sorry soap opera. Equally, I don’t blame British Aerospace – as opportunist and money-grabbing as it was at the time. Once again, we need to look at the Government for selling Rover to a convenient port in a storm in 1988 and not sticking with it, just at the point it was about to turn the corner. Instead of ditching Rover, maybe it should have been nurturing a deeper partnership with Honda. There was certainly plenty of mutual respect at the time and Honda clearly wanted partnership, not ownership.

Instead, the Government pulled the plug and we were left with the end game, even if we didn’t know it at the time – as I said in 1994, and as I still feel today… ‘oh bollocks’ to it all.

Keith Adams


  1. That German concern is responsible for selling Land Rover to Ford, a brand created by Rover, and they ‘stole’ the Mini concept. How could MG Rover have carried on?

  2. look at land rover and jaguar now though!!! hard to say as i hated the thought of it when it happened as i have always had rovers and land rovers and proud to have. ie sd1 v8 24 years discos and rang rover classic v8s 23 years!!! BMW did strip rover group bare though..

  3. I recall hearing the news on BBC1 on the evening of 31st January 1994 and feeling absolutely horrified as I viewed BMW as more of a predator than a partner. Questions about the future of much loved classic engines such as the V8 and T Series were of course thought about, from an emotional rather than business perspective.

    Watching the likes of Michael Heseltine proudly stating it was an idea partnership between the two companies brought out a cynical response from me as I saw Rover as becoming the potential underdog not being given freedom to develop the sort of products and engines it knew its customers wanted to buy, especially for the Rover Cars business. I even questioned how this could work as the two companies were so completely different. After all, Rover cars were now all front-wheel drive with a transverse engine layout while the Land Rovers were all four-wheel drive with a small engine line-up now only suited for that application.

    How could BMW achieve component sharing and commonalty of synergies and major engineering in the short or medium term? Moreover, how would they be able to manage the logistics of doubling both their production and number of models overnight through acquiring the more diverse Rover Group? It was clear that our MPs (particularly in the Government) and so-called City Analysts had not given this observation a thought, but instead were merely focusing on how good the BMW brand and product were, which would naturally be mirrored in current and future Rover Cars models. How very wrong they were; this was the last thing BMW would want – people seeing Rovers as a kind of British brand synominous with dynamic driving qualities and stealing sales from the home camp. I genuinely could not see this deal having any long term success without significant compromises in the operational strategies of the Rover Group we had all become accustomed to over the last eight years or so. And I didn’t even have a degree in Business Studies or Economics, let alone a fancy office in the City to work this out!

  4. Remember at the time the ‘joke’ fax that went round, with a Rover letterhead, pretending to be a list of translations into German, things like ‘Panel Gap = Dozentfitz’ etc

    Was quite young at the time, but remember thinking the numerically, the model ranges slotted together, even if market-wise they didn’t – ie. from the same company you could buy a:

    I’m surprised the resident Conspiracy theorists haven’t suggested that BMW ran Rover into the ground just to get a hold of the 1-2-4-6-8- numbering schemes for new models…

    Chrysler alliance – The 300 would’ve made a fantastic Rover, given that it is already compared to P5s and Bentleys. With a 5 series platform it would’ve been a great range-topper, a more successful badge engineering than the Lancia Thema…

  5. I’m sure there were many in BMW that were wholly against the tie-up, and for good reason. If there is anyone to blame it is BAe systems and Margret Thatcher for their bargain basement dirty handed tactics. Mind you given GMs Midas touch of turning even copper to crap, I don’t think AustinRover group could have fared well under those guys either.

  6. There is a clear inconsistency between your assertion ( wholly unsupported by evidence ) that BAe starved the future of new models, and the later statement that ” the brilliant new Discovery…” ” the Freelander , MGF , and 200/400 were already in the pipeline “

  7. I couldn’t believe that the carefully nurtured Honda partnership was at an end. All the hard work put into Honda working methods to bring Rover into profitable working methods. The sale was an utter sham.
    Before Rover was sold to British aerospace. I honestly thought Rover was to be put on the stock market with Honda taking a larger stake while government retained a golden share as it had with Jaguar. Selling to British Aerospace made no sense to me and when Professor Roland Smith took over even less so.
    My thoughts like most at the initial takeover by BMW was a Rover 800 based on a 5 series but when it came to light that there was to be no platform sharing I thought how is a small company like BMW going to fund a new model range especially as the Chrysler deal was eventually scuppered.
    BMW were overstretched with a combination of complete and utterly arrogance. They bought Rover with all the brands thinking it was a sweet shop, the problem was their plan was a daydream of Riley’s, Rovers, Triumphs, Austin-Healey’s Minis and Land Rover’s that they could not afford and as time dragged on the 800 became old and was scrapped. No Vehicle would be allowed to compete with their precious BMW’s which laughingly they saw as not only as saloon cars but sports cars too.
    All they had to do is look to VW for inspiration but the Munich “Vater knows best” blew up in their faces and and wrecked British motor manufacturing for many years.

    Or is it just me…..

  8. Of course. I was writing from a position of assumed knowledge – and it all boils down to Rover’s sheer brilliance at the time of producing new cars on a shoestring.

    1) The Freelander was a Rover Cars project that was originally envisaged to be part-built by Valmet in Finland to keep costs down and flexibility up. When BMW took over, it brought the manufacturing in-house.
    2) MGF – as we all know – used a considerable amount of parts from other models. It was a long way from being clean-sheet, and its excellence was once again testament to the engineering skills at Rover. It was also built in association with Mayflower in order to keep costs down and flexibility up.
    3) Rover 200 (R3) – a very clever re-package of the R8 with Maestro rear suspension (total budget was £250m, in comparison with, say Ford’s £1bn-plus for the Escort 1990). But a project done on the cheap, and a long way from being new from being ground-up. Intended to replace Metro, too, which was costly to make.
    4) Rover 400 (HHR) – Honda Civic with very few changes. Again, a joint venture, to keep costs down.
    5) Discovery – 1989 model was a cleverly repackaged Range Rover – and Discovery II was a BMW-era project.

    Bottom line is that the model range looked very good, and punched WAY above its weight at the time, but all models were done on the cheap. Hence my comment (supported by actual events) that BAe starved Rover of money.

    Lets also consider the two vitally important models that were cancelled under BAe in favour of the cost-cut models we received: AR6 (instead we got the K-series interconnected Metro), AR16 (all new mid-sized car to replace the Montego – instead we had the booted R8 and the 600). The death of the AR6 was a particular blow, IMHO, as Rover still had the capability to build a world-class small car.

    Also, you might want to look at Cowley before and after BAe’s ownership of Rover…

    Point is, it’s a well trodden argument here that BMW killed Rover, but I’d assert that as much, if not more, damage was inflicted during the BAe era.

  9. BAe….They were only interested in the land bank that came with their purchase. They were simply asset strippers. There was only ever the most perfunctory piece of window dressing masquerading as a product plan or investment.

    BMW….They had a single interest. To gain a brand and a manufacturing site to allow a product range that sat below BMS’s existing premium market niche. Mini and Cowley or Longbridge suited this. Cowley had a more compliant workforce, with a better quality record, so the money went there.

    It really was as simple as that. BAe had no intention to make cars – BMW were never interested in LR’s 4×4 technology (they didn’t have any).

  10. @8

    The AR6 and AR16 would have taken the European mainstream family car market by storm, and they would have also given the Austin brand a new lease on life. Sticking the Rover longship on an updated Metro may have seemed like an acceptable idea at the time, but as the 1990s unfolded, it looked like the bottom-heaviness of the Rover range was dragging the reputation of the once prestigious brand down. Had the two tier Austin/Rover branding structure been retained (eg. Toyota/Lexus, VW/Audi) then the Rover brand could have conceivably been much stronger.

    While Rover got busy rebranding Austins, it neglected the executive car market that it should have been focusing on. Honda/Acura got a new, larger Legend in 1991, and they also got a D-segment car based on a cut-down version of the Legend’s platform, known as the Vigor. Branded as Acuras, the early 90s Legend and Vigor took the Acura brand from strength to strength. They’re still highly regarded in the USA.

    What did Rover get? A Rover 600 that was simply a restyled European market Honda Accord, and a Rover 800 that was a simple update of a car that had been launched six years earlier. The original Legend had depended on Rover’s input, but Honda soon left Rover in the dust. The Vigor’s successor, the Acura TL, became one of the USA’s best selling cars in the 2000s. BAE can take the blame for that lost opportunity.

    Whether in Europe, North America or the Asia-Pacific region, it’s a damn shame that Rover never got to use the bases of the Legend and Vigor to regain its credibility as a respected maker of luxurious executive cars. As low-riding counterparts to the successful Land Rover range, they would have given the company a stronger international presence. From a national perspective, this would have given the UK two complete luxury car companies to duke it out across the world, in the form of Jaguar and Rover/LR. Consider how much the German motor industry has benefited from the rivalry between BMW, Mercedes-Benz, Porsche and Audi over the years, and consider how Britain would have benefited from something similar. The 1990s was the decade of globalisation in the motor industry, especially in the market of luxury cars, and Rover missed the boat, thanks in no small part to BAE.

    So yes, it’s pretty apparent to anyone with a basic understanding of what went on at Austin Rover that BAE was responsible for some of the most catastrophic damage to it. BMW’s record isn’t spotless at all, but they were nowhere near as destructive as BAE, or Daimler-Benz was at Chrysler for that matter.

  11. BMW was the last of a long line of diasters. BAE systems ran the company on the cheap, leaving Rover engineers to work miracles with pennys, and as you say, reliant on Rover.

    Then BMW came in and messed it up. They took too long to develope a new small car, and when the Metro/100 died, the company was in trouble.

    The also forced Rovers to be old farts cars. Nothing wrong with that, old farts buy BMWs, young people can’t afford the insurance. The problem is, old drivers won’t admit they are old, with bad backs, worn hips and need a nice comfy Rover.

    They want to pretend they are still young, so car companies have to pretend to market their cars at the young, even if they are aimed at the 50 plus crowd.

  12. My boss told me about this deal at work. I thought, “that’s bad”.
    I also remember a Freudian slip when BLMC were formed. The newsreader said “there has been a murder – I’m sorry, a merger – between British Motor Holdings and Leyland Motors”. Right first time.

  13. Keith may criticise Mrs Thatcher for wanting to sell the Rover Group ASAP no matter what the price but one has to applaud first the Wilson Labour Government for rescuing BLMC, which is more than Tony Blair’s New Labour did in 1999 & 2005, then Mrs Thatcher for sticking with a nationalised BL when all around her were urging for the plug to be pulled.

    BAe may have starved the company of resources which meant that the Metro & 800 were merely facelifted instead of fully replaced but many would argue that the best car ever made by post Leyland BMC merger, the Rover 600, was made under their stewardship.

    Having driven a Rover 75 & a 600, I would rather buy the latter for driving pleasure & reliability if not for room.

    Honda in a way caused Rover to lose its way with HH-R; a car that at the time committed that age old sin of being between sizes (the Volvo 440 being its only competitor in what is now the Octavia/MG6 sector) which led Rover to produce the R3 which, itself was between sizes. I own an R3 & can vouch that it is very much an Allegro sized car when that sector grew with the advent of the Mark 3 Escort in 1980.

    BMW ironically priced these two models incorrectly. Ironically they saw Rover as a lower cost brand to BMW then priced an Allegro sized car at Escort prices & a Volvo 440 sized one at Cavalier ones. By the time the 25 & 45 were introduced with their realigned pricing, the rot had set in.

  14. Given BMW’s current might and the success of the New Mini, it’s easy to give in to the urge to point fingers at the Bavarians, as far as Rover’s fate’s concerned. But things usually aren’t simple, particularly not this simple.

    I wouldn’t call BMW asset-strippers in this context, not at all. BMW lost an awful lot of money during the Rover era, which may or may not have been recouped only recently due to Mini’s success, but certainly no earlier.
    The rough calculation behind this reasoning is fairly straightforward: BMW, after all, did invest heavily in the Rover Group as a whole – not just the third generation Range Rover and R50 Mini, but also, lest we forget, the R40 and the almost-finishes R30. Funding for these projects came from BMW’s coffers – Rover wouldn’t have been able to finance these bespoke platforms, even if their Bavarian masters had urged them to.
    BMW could not only write off the entire cost of the Rover models, but also famously didn’t earn any money with the R50 Mini, despite its smashing sales success. The sale of LR to Ford didn’t garner massive returns as well, given the large sums invested beforehand.

    Of course, BMW did play a part in Rover’s demise, and not a heroical one at that. But I’d call BMW’s actions naive, rather than fiendishly sinister. They overstretched themselves both financially and logistically and failed to really comprehend the better part of the very company they’d acquired. That way, they wasted billions of their Deutschmarks, only part of which, the faint hope was, the New Mini would ever recoup.
    Wolfgang Reitzle, probably the sharpest among BMW executives, was strongly opposed to the takeover, and for good reason, as time has proven. BMW would’ve been better off without Rover, and Rover would’ve been better off in bed with Honda (although it can be argued whether the Japanese would’ve allowed them to prosper into a global competitor).

  15. I remember the first picture in this blog so well. How many would love to of taken a running kick right up Pischetsrieder Bu..

  16. All these years on and are BMW still paying the price?
    Apart from 3 door version of Mini’s I can’t beleive that the other versions make any money. BMW had a smaller fwd platform for Rover 35/55 (2002/2003 launch) but it was never used.

    Instead to keep costs down they have designed another fwd platform for latest gen Mini’s and new 1-Series. Should this investment money also be considered in the Rover debacle?

  17. Keith makes a great point.

    AR/RG/MGR have always been able to produce competitive cars on a shoestring.

    They took the R8 platform and had a 4 and 3/5 door saloon and hatches, but also a fetching tourer, the gorgeous Tomcat, cabrio, then based the new small car R3 on it.

    Even the 800 facelift was successful, somehow the nip and tuck made the car look fresher and less square-edged than the predecessor.
    The ‘made for US’ coupe, another masterpiece.

    Then the ‘MG’ Z range – took the 3 car range and made sports hatches and saloons from them.
    In particular the ZT V8, took a FWD saloon car, converted to RWD and planted a V8.
    The MG ZV XPower – an ugly duckling Qvale Mangusta given a facelift, some Fiat lights and turned into a gorgeous, if slow selling, halo supercar.

    Having owned a Honda, I’d like to think that they’d picked something up from Rover, the cream leather, wood and relaxing driving style would give that impression, as would the fact it was an 800-style coupe-from-saloon conversion.

  18. Looking at this from another perspective, namely social psychology rather than pure business strategy and benefits, it is clear that many British people viewed this takeover as something more serious – the loss of a major vehicle manufacturer that still formed a pertinent part of our (Britain’s) UK manufacturing identity.

    Over the years a number of British companies had been sold off or privatised under Mrs Thatcher’s Government, many of which such as Westlands Helicopters creating outrage that we had sold out an important part of our manufacturing sector to Johnny Foreigner. As a nation we still felt angered that we were surrendering part of our identity and even manufacturing “excellence”. Cast your mind back to the 1980s and there was initial resentment that the Government had encouraged the likes of Nissan – a Japanese company – to open up an assembly plant in the North East. Many people were horrified that our Government was allowing a potential competitor onto home turf to compete with us and potentially inflict further wounds on the home team, namely Austin Rover Group. Only by the 1990s when there was regular positive news coming out of the Nissan plant that we could assemble cars as well as those employed in the main Japanese assembly plants and also deliver a level of productivity that beat rival companies in Europe (think PSA Group and Fiat Group), did we see the benefits of this inward investment. We also woke up to the fact that several thousand new skilled jobs had been created once again in a deprived area. This made similar investment pledges by Honda and Toyota more acceptable – they were opening new assembly plants rather than taking over an existing company.

    Did we complain when DAF took over Leyland Trucks or when Volvo acquired Leyland Bus in the early 1990s? No, because we did not see the Netherlands or Sweden as rivals or a serious threat to our once proud manufacturing reputation and identity. The same also applied when Ford took over Aston Martin and Jaguar as not only did we have a friendly relationship with America, but they already had long established vehicle manufacturing interests in the UK through Ford and Vauxhall.

    But BMW was different. In the 1990s there was still animosity by the older generation towards Germany for their actions of 1939-1945. The German working culture and attitude was different to ours and we still perceived them as a threat to our ideological desire to ‘dominant the world’ through our manufacturing base and other enterprises. Indeed, as one phone-in commentator on BBC Radio 2 said on the morning of 31st January 1994 when the news about BMW’s takeover of the Rover Group emerged, “they could not get us with their bombs but they can get us with their cheque books”. Quite harsh words, I am sure you will agree. The ability to deliver forgiveness for the acts of five decades before was still not as prominent as it is today. Our last major British-owned volume vehicle manufacturer had been surrendered by our own (namely British Aerospace and the Government who we put great faith in) Establishment to our industrial enemy – Germany.

    Please read some of the published social psychology literature about forgiveness to appreciate this perspective.

  19. Blaming the Thatcher government is easy, but you must remember that they got BL to do an assessment of the firms prospects in 1979 and the outlook was bleak.
    After the Maestro/Montego debacle ARG’s credibility was shot through. As I have written on the main site, AR6 might have been a major step forward in small car design, but who on earth was going to buy it in sufficient numbers from a manufacturer with a persistent reputation for poor quality and unreliability?
    Honda was a Trojan horse who used ARG to establish their reputaion in Europe. Once Swindon was up and running, the relationship with Rover became superflous, and the Rover 600 and 400/45/HHR were developed under strict control by Honda. Honda did not want to take over Rover.
    Rover had briefly attained a technical lead through 16 valve technology, but once every manufacturer had adopted this, then the reason for buying a Rover was gone.
    And the chronic unreliability of the K-series, where HGF seemed to be part of the joys of Rover ownership, was inexcusable.

    I feel some of you are too emotionally attached to BMC and cannot see the wood for the trees. And I mean that in the nicest possible way. Who was going to buy all these fantasy cars?

  20. @19 – Comments RE: who on earth was going to buy the AR6 – Well, the Metro sold incredibly well throughout the 1980’s and early 1990’s – certainly in the home market. It’s failure in the European market can be blamed on the poor network and marketing. Metro lasted far longer than it should even by 1990 and despite that had a huge following – AR6 would have taken it further at just the right time. For all the rights that the Rover Metro corrected, there were no doubt many people who saw it for what it was – a Metro body with some better parts attached. That’s what killed the Metro in the end and the disastrous 1995 re-style killed it dead (yet remarkably it still convinced 10’s of 000’s of UK buyers to part with money for a further few years. Metro-market was still a booming one for ARG/Rover and killing AR6 was incredibly short sighted given they had nothing else in their armoury to replace it with.

  21. The vast majority of Metro buyers were probably former Mini owners. The margins on the AR6 would have been small, compounded by cut throat competion from equally competent rivals, and the development costs exhorbitant for what return, if any, could be gained from the investment.
    BL/Rover’s marketing men had a history of promising more than they could deliver.
    And by the 1990’s the British built Nissan Micra had become a popular choice for many buyers.

  22. If only they’d developed closer ties with Honda and replaced the notorious K series with Honda based engines. I really think leaving Honda behind was a big mistake as the company seemed to be doing very well when they were linked to Honda and the 600 was an excellent car. Indeed had Rover developed successors to the 400, 600 and 800 with Honda, then they could be right up there with BMW, whose products I find totally overrated and lacking in charm.

  23. And another thing!
    The Rover R8 200 gave the false impression that BMC/Rover was a viable concern, but this success was not sustainable once other manufacturers had adopted 16 valve technology, which was not that hard.
    The R8 briefly banished the old BL/Rover reliability woes, but the post 1995 K-series engine simply re-enforced all the bad stereotypes about British engineering and manufacturing.
    It was all a grand illusion.

  24. A few points –

    I thought “Great” when BMW bought Rover. Acquired by the company it is in many ways now trying to be. The Honda years saw a good image develop. Now BMW can provide the funds for ‘ground up’ Rovers, I thought.

    At the time BMW acquired Rover, I think the Honda relationship had passed its peak. Joint venture had become Rover ‘topping and tailing’ Hondas – R8 to HHR.

    The British Aerospace profit on sale, under invest during ownership is gross ! However, BMW did rather well really – £800m for the lot initially, have problems with the Rover bit but sell Land Rover and prosper with MINI. I don’t think, however, BMW were stripping the bits they wanted. I think initially they wanted, saw advantages in having all of Rover Group.

    I think you’re right, Keith. The critical event was the ‘get shot of as soon as possible” sale to British Aerospace

  25. …. and yes, the 20 years ago bit is frightening! To me it’s recent past but for so many it must be history!

  26. My Uncle worked for Rover at that time, until he was made redundant when Rover went under and he still hates BMW after all these years. I think he knew in advance of the sale and was disgusted with it, I think mainly because they were Germans, but he didn’t mind the Japanese though funnily enough…

    As I’ve said before, you can’t really blame BMW, it’s the stupidity of successive governments and management that lead to it all. Although having said that, when we joined the common market, is was agreed that we would give up our manufacturing structure and shift to banking and service industry jobs; which is what we have now.

  27. If you bring things down to brass tacks, Some of Rovers best years were the BAe era, that is until it had a right touch flogging it to BMW, Which I believe had all the best intentions, it could have stuck with Rover and made it a huge success, the Quandt family and other major shareholders did not have the patience.

    The EU had a hand in the demise as well. Let them burn in hell.

  28. ” The EU had a hand in the demise as well. Let them burn in hell.”

    Said with real passion, Francis. I like it!!

  29. Funny to read, Keith;
    “… – ironic, I guess, as I had recently ended a long line of British cars, and was then currently driving a French saloon.”
    Especially, when reading the same-old comments again.

    Now, who was to blame for the demise of Rover:
    The EU?
    Rover themself?
    The fleeing customers?

    What makes us to invest a truckload of money into a new car.
    What makes us NOT?

    Now; think again:
    Who’s to blame?
    Of-course it’s “The Others”. “Their” fault anyway! Not me! Point away!

    And since only one in that aforementioned list talks funny and has a spotted history, let’s blame them!
    So we all can wash our hands in innocence, right?

    NB, BTW, since we’re mudslinging anyway:
    WW2, where did Nazi-Germany get their oil from to fuel their war apparatus? Who allowed the suppliers to do so?
    Who doesn’t have a spotted past one way, or another?


  30. It would have been interesting to see what would have happened if Jon Moulton’s Alchemy partners had taken it over after BMW. I know they were derided because they would have had to downsize considerably intitially, but look at what eventually happened anyway??

  31. Between 1993 and 1996 I was doing my engineering degree with the absolute intention of working at Longbridge at some point in my life. There was no negotiaion on this, it was going to happen in some form or another as I so wanted to be part of something special and it was me next door neighbour who brought prototype vehicles home that sealed my intentions – especially the day I went out in a car that was badged as a 220GTi which it had a supercharged K block in it. That was it, I was hooked and NOTHING was going to stop me. And in 2000/1 I started at MG Rover in South Engineering and never looked back!

    Apart from getting over the initial “shock” of BMW buying the company, I could see the positives and thought that this would be a good “re-boot” for the company and Rover Group would expand and just grow to new heights with a much needed injection of cash.

    However, as time went on, I became a tiny bit suspicious of BMW’s long term plan and the more I thought about it, the more worried I got.

    I was doing a Marketing module (as a bolt on to my engineering degree) and I chose to write about how different manufacturers coped with differing volumes and how their marketing strategies reflected their market share etc. Then it struck me, what was missing from BMW’s range – 4WD Technology, FWD technology and a small platform. The more I rolled this around in my student brain (which I will admit was clouded slightly by the local ales) the more I came up with a startling theory. What if BMW weren’t in this for the long run? What if they gave the impression that they were to the outside world and then at a given point, they took what they wanted and spat the rest out?

    After a few weeks of writing and meeting probably my first ever deadline at Uni (well I am an engineer and as Douglas Adams once said “I love deadlines, I like the whooshing sound as the fly by”) I put it to the “world” that come the turn of the clicking 1999 to 2000 calendar, BMW would take 4WD technology and aim for something close to Range Rover/Disco vehicles, take front wheel drive layouts and also take a small platform to build upon – something like the much discussed “Mini” that was lurking around at the time.

    Needless to say, my marketing lecturer put my theory in the “don’t be so stupid” box – although the mark I got was acceptable and reasonable, he found my conclusion to be “without substance” and my grasp on vehicle marketing and BMW’s intentions was sadly lacking and I should stick to engines, chassis and nuts and bolts.

    Imagine then my scrabbling around in the loft back in 2000 when BMW did take 4WD technology and gave us the X5 and then X3 etc and pilfer FWD and MINI platform for their own as they ditched the rest to the “gentleman” that would give the company another 5 years of life, production and fun before something went a bit wrong and everything went “pop”, for the paper copy of my marketing assignment as evidence that wasn’t talking out of a certain orifice and I was absolutely right. I did find my paper copy eventually and went back to my university and found “said lecturer” who had dismissed my theory and gently popped it on his desk and asked him to read it. The silence was positively amusing and I enjoyed every second of the “squirming” that was being displayed a the other side of the desk whilst I sipped at my cup of tea!

    Unfortunately, it had absolutley no affect on my final result from 1996, but if it had, it could have been the last few % that I needed to tip me over to a 1st. The squirming from my red faced lecturer was more than enough to make me feel “avenged!!!”. I did say to him not to dismiss engineers at that point because at the end of the day, engineers probably know their market better than the Sales and Marketing type chaps and chapesses and will fight as much as they can as to achieve their goals in the automotive industry!

    What it did prove is that if you look at things hard enough and for long enough, things will present themselves in a very different light and you may come up with a theory that many will dismiss, but may just prove to be right!

    What does amaze me though still is that things that happened 20, 14 and 9 years ago are stil written about with such anger, frustration, passion and love for a company that was considered to be at the bottom of the maunfacturers pile, useless and full of problems (one or two I suppose). I for one am thankful for my time at MGR be it under BMW or the “other lot”. I learnt so much in a very short space of time and was proud to wear those two badges and say who I worked for!!

  32. The only surprising thing is thatpeople believe that BMW, or any other foreign company, really has any long term plans for British industry. They don’t it is all only a matter of extracting the knowledge you need and then finding a painless way of getting rid of what could potentially be a competitor. Unfortunately our industrialists, bankers, civil servants and of course politicians neither cared nor had the brains to care. <of course Britains tendency to believe everything marketing experts throw at us such as "Vorsprung durch Technik" for an overpriced VW. Or "Freude am Fahren" for what is basically a fairly average pieve of kit. At least JLR is still around but of course our ruling class and of course police, and other tax paid organisations prefer foreign products. And that is the main problem go to Germany or France and officialdom will drive around in the biggest heap of dog turd as long as it is made locally.

  33. @33 Your theory would hold water if Rover had been a going concern when BMW pulled the plug, but it wasnt. Rovers losses where so bad that BMW itself was under threat, its share value falling dramatically with the multi-nationals circling for a cheap acquisition. Also it didnt pilfer Rovers FWD technology. Both the Mini and 75 platform where BMW’s to start with! Nor do I think BMW’s X-drive 4 wheel drive technology shares much with Landrovers. BMW’s biggest mistake was to trust British Management, lead by John Towers to take their money and spend it wisely. They didnt. The 75 was years late with BMW parachuting in a hit squad to rectify the appalling quality of early pilot build cars. By the time BMW realised what a shower they where dealing with the damage was done.

  34. @ 37

    Well yes you can see the business necessity of BMW pulling out if Rover’s losses were putting BMW itself at risk.

    However, operational and quality issues are not in themselves reason for pulling out. If the parent company sees a future for its acquired brand then surely it steps in to sort such problems. I’m sure VW had to implement its systems at Skoda !

  35. If Rover was such a basket case, why did a blue chip, highly respected the world -over company that defined what the “ultimate driving machine” was, with most of the board and management with a “DR” in front of their name think they was doing buying Rover?

    Its easy to postulate on here, I often do. Longbridge needed a billion throwing across it before it built another ground up car.

    I would sooner see the prostitutes at PWC in jail for their fee charging with impunity rather than criticise Towers and co for keeping the place open and trying and failing in trying to sell or partner the company and keep it going.

  36. #30.Germany’s only oil supplies in WW2 ( certainly post 1941 ) came from Rumania, and these were minimal in relation to their needs. The vast bulk of fuel came from distillation of coal by-products , and it was as these industries , and thus the fuel supplies, were gradually smashed up by the bombing campaign that the Tiger tanks could no longer function, and the Luftwaffe could only operate at a fraction of its theoretical capacity

  37. Re 37: Well put! BMW’s only interest was in acquiring a brand name and manufacturing site for a product to sit below and/or in a different niche their existing product range. Mini provided the brand, and Cowley provided the manufacturing site. The styling was from BMW’s LA studio, and the engineering was from Munich.

    BMW had absolutely no interest in ‘4×4 technology’ from LR, for the simple reason that LR had no ‘4×4 technology’ worth having. The only think BMW took was hill-descent.

    It’s about time that people stopped their fantasies about the might that was Rover (and especially LR).

  38. There has been mention of the losses that the Rover Group made during the BMW ownership period, particularly in the last few years. One point to remember here is that under German accounting practises, companies do not amortise investment over such a long period compared to the practises adopted by many UK companies. Using BMW as an example, if they invest £500 million in a new car, under German accounting practises they would be expected to pay off that entire investment figure within the first year of it entering production and going on sale. In 1998 two important new models went on sale from the Rover Group – the Land Rover Discovery Series II (at least 80% of which was new) and the Rover 75 which cost £700 million to develop.

    Given that the latter went on sale in June 1999 (which was as planned) rather than at the beginning of the year and the initial unveiling of it at the 1998 British Motor Show had been heavily overshadowed by other news about the company, which had the same name (Rover; rather than the press being more accurate by calling specific parts of the business Rover Cars, Land Rover or Rover Group), it was inevitable a loss would be recorded for 1999. This latter point, together with a huge fall in sales of Rover cars and the MGF in a key market like Japan during the same period because of the premium pricing strategy that was now in place, and Japanese buyers finding some of the models too expensive against their more recent European counterparts, undoubtedly had a major impact on Rover Group’s financial performance on paper.

  39. Re 42: You forgot to mention the massive warranty bills being generated by (mainly) LR. By the time LR was sold to Ford, this issue still hadn’t been cured, with LR warranty running into several hundred million dollars per year.

    One of Ford’s biggest achievements with LR was in stopping people smoking and eating in unfinished cars on the Solihull lines during lunch breaks!

  40. @40 Actually it was Texaco…
    Your free to Google this.
    And these were the only ships which were not touched at all by the German U-boats…
    That’s another reason why the US entered this side of WW2 so relatively late…
    And who could read “Emigma”?

    Anyway, doesn’t really matter.
    That’s not the topic here.
    BMW was not to blame for the demise of Rover; they just turned out the lights after they took all they could carry…

  41. All would have been so much better if Tony Benn, whose interventions in the British car industry were generally disastrous, did not decide to create British Leyland. I’m sure hugely respected brands like Triumph, Jaguar and Rover were brought down to prop up the ailing Austin Morris products in the seventies and were often guilty by association. Had Leyland survived on its own and took over Jaguar and Mini, the most desirable bits, from BMC, then it would have been a different story. I’m also convinced Leyland would still have been a big player in the bus and lorry market.

  42. 33@ Nic I share your sentiments, but in reality the X5 was the IX (4×4) floorpan of the 1996 E39 5 series, rather than an armfull of Solihul. I’d hazzard a guess at in-bred Lodge loving GB manglement being the culprits in this and any other industry we once nutured.

  43. I blame the HHR, Rover’s core product went from great to also ran in one fell swoop. Who wants to buy a car that eats head gaskets?
    Who was responsible: Honda, BAe, Rover or all of the above

    The models BMW were responsible for were great, 75 MINI and especially the Range Rover.

  44. The HHR should’ve been marketed as a posh Escort/Astra.

    Target just below the Golf, where the Octavia managed to make huge strides.

    600/75 should’ve been the D-segment entry.

    Reliability woes with the K series should’ve been sorted.
    Was one of the nails in the coffin.
    People who don’t know cars go to people who they think know cars, but are really armchair Clarksons – Rover? (suck air through teeth) HGF.

  45. #44. If you had read my post more carefully you would have seen that I said ” certainly after 1941″ . In any event, the blockade by the Royal Navy of German Ports meant that whatever got through was a trickle. This was why the Germans were so keen to break through to the Middle East

    PS: and if you think Google is a reliable source of information then a certain amount of naivete is apparent

  46. I critised Malcolm Riffkin live on Question Time. It came from Oxford that week. He got very hot under the collar and completely failed to respond. My claim to fame: I made a senior Tory sweat live on telly! I was sat on the front row next to a friend of mine who was dressed as the Cat in the Hat.

  47. But would BMW have bought Rover if some one other than Pischetsrieder had been in charge?

    I reckon his links with Issi, gave him an overriding desire to steer the development of a new mini.

    On hearing the news of the BMW takeover my concern: was for future Rovers being RWD if made to share floorpans with BMW models.

  48. @50: So true. Granted. But Google seems to be just as accurate as the history books we used to grow up with…
    So what *is* the truth?

    I was just getting a little bored by the same accusations by the same people towards again BMW.
    What would have happened if BL/Rover had the finances to produce the 9X? With all due respect to Izzy, but that was a square box on wheels, a predecessor to, and just as boring as, the later Pug 104.
    Or the “Spiritual”, which really is more a 500-clone than a true reinvention of the Mini.
    In my opinion; BMW is the best thing that could’ve happend to the Mini.
    A MINI (or Bini, if you like) still looks and handles in the real spirit of the Cooper.
    I don’t think anybody could’ve done it better.
    Sales are quite OK too. Something BMW can only pad themselves on the shoulder for.

    I really can’t see what the fuzz is all about with the MINI and BMW…
    Not built in the UK?
    Ten years ago? One wonders why…
    And what about now then?
    Nedcar doesn’t need to be build and is closer to the German border…

    BMW is free to do with their product as they wish.
    Bought and duly paid for.
    To them who don’t like any of it; OK, we get it.
    Get over it, please.
    And there’s certainly no need to blame a country anymore for what a previous generation did.

  49. Christopher @6

    ” There is a clear inconsistency between your assertion ( wholly unsupported by evidence ) that BAe starved the future of new models, and the later statement that ” the brilliant new Discovery…” ” the Freelander , MGF , and 200/400 were already in the pipeline “ ”

    Keith has already corrected you but I have to say I’m amazed by your comment!!

  50. I’m glad someone mentioned German accounting practice (42. David 3500) as this has got to be the main reason the Quandt family got itchy feet.
    Remember also they were making Rover’s less prestige by removing much of the chromework on the smaller cars but keeping them at a premium price.
    If BMW had weathered the storm just another couple of years until the MINI took off, it’s profits would have made the difference.
    I seem to recall they also had plans to sell MINIs in boutiques rather than from oily garage forecourts.

  51. @ 41 (Kev) “the [MINI’s] engineering was from Munich…
    It’s about time that people stopped their fantasies about the might that was Rover…”

    This is not true. Rover DID engineer most of the R50 MINI. Allow me to quote from the ‘MINI Development History’ on this website:

    “Despite post-launch hints from BMW that it was a mostly German engineering effort, former MINI development engineer Robin Hall was keen to point out (in an interview for CAR in 2001) that initially, BMW’s input into the MINI amounted to setting a number of parameters. ‘The brief from BMW was for a MacPherson strut front and Z-axle rear-axle layout. That was it. There are no BMW components in the systems and they were entirely designed at Rover’s Gaydon engineering centre in Warwickshire. The geometry, component stiffness, durability, compliances – all were specified and designed by Rover engineers.’

    “Hall was the front-axle system engineer responsible for the packaging, design and integration of the MINI chassis. ‘When we started, very little was defined. BMW didn’t ask for any BMW components, it let us go away and get on with it. Even the Mini’s engine and transmission was engineered at Longbridge and Gaydon. The engine was worked on at Powertrain, who also did the gearbox, which is based on the unit used by Rover. The Cooper S uses a Getrag box, but the development was carried out at Longbridge. I’d say there were hundreds of British engineers on Mini, maybe as many as 300 or 400.’”

    The fantasy is yours! ((:-o)

  52. Don’t forget VW’s role in Rover’s demise – family member Porsche put the boot in with the EU/EC in order to block Gov’t grants for long bridge and the R30.

    VW was after a share of BMW and saw Rover as a way to weaken the Bavarian’s position. BMW was in crisis at the time of the sale, big heads had rolled and the Quant’s were not happy. Rover was sacrificed to see off the circling VW vulture.

    Moulton asserts that the Land Rover sale was his suggestion, having seen the popularity of the X5 on his winter hols, he put it to BMW that they didn’t need
    L-R and the sale of the 4X4 biz. would bring in some cash to counter the costs of the whole disaster.

    As for Alchemy, their MG plan was thwarted by BMW lumbering them with liabilities they had no chance of meeting, BMW was then able to cheaply pass the hot potato to Towers & Co., a neat damage-limitation strategy for the germans.

  53. The BMW board tore itself apart over Rover.
    It never had a devious plan, other than Pischetsrieder’s misty-eyed ideas about honouring Uncle Issy and reviving “his” company(ies).
    The whole saga was indicative of incompetence on the part of BMW more than anything else.
    Had Sterling not been so strong, things might have been different.
    But I think the big problem was BMW’s strategy once it had got hold of the company.
    It couldn’t or wouldn’t share platforms and many parts.
    Costs were therefore high and the volumes small.
    Had VW taken over, with the strategies it has used with SEAT and Skoda, of different styling but basically the same oily bits, the company might have had a better chance of survival.
    A Metro based on the Polo/Ibiza/Fabia, a 200 based on the Golf/Leon/Octavia etc.
    A Mini based on the Arosa/Lupo even.

  54. @59, Rover 75: modified Z axle, many electrical sub structures and CAN system, front lower wishbones, even pad wear indicators were BMW parts.

    Range Rover L322 3.0 TD engines and wiring systems from BMW, even looking under an X5 and an L322 they share identical 3.0 TD and ZF ‘boxes.

  55. @ 59

    I can see your point reference parts, platform sharing and whether a VW acquisition of Rover may, therefore, have been better. However, I’m wondering if the market can/could have taken yet another VW derivative? Would an Octavia with a Rover grille be a bit too HHR, ie not Rover enough?

  56. Re 57: “Even the Mini’s engine and transmission was engineered at Longbridge and Gaydon.”

    Would that be the Longbridge and Gaydon Chrysler plants?

  57. @56

    MINI showrooms, certainly the one I visited, are more like a nightclub / trendy boutique than a traditional scuffed-white-walled, broken-coffee-machine dealer.


    I’d say that Skoda have filled the void left by Rover somewhat, with their sub-premium positioning.
    100 – Citigroup
    200 – Fabia
    SW – Yeti
    400 – Rapid
    600 – Octavia
    800 – Superb

  58. Wii M @ 63

    ” I’d say that Skoda have filled the void left by Rover somewhat ”

    Emphasis on the word ‘somewhat’. Approximate price and market segment maybe but in terms of image, feel never! I mean, for example, even a “getting a bit long in the tooth by 1997” Rover 800 has a far more special feel than a ‘Superb’.

    Today’s roads are missing that true Brit feel !

  59. Kev @62

    The Chrysler engine was extensively re-worked by Rover, to a point where Chrysler adopted the “Roverised” version for their own cars s many of its cruder aspects were remedied.

    Have a look around, the story (from the horses mouth) will be somewhere on this site…

  60. 14:” I wouldn’t call BMW asset-strippers in this context, not at all. BMW lost an awful lot of money during the Rover era, which may or may not have been recouped only recently due to Mini’s success, but certainly no earlier.”

    Most of BMW’s “Rover” investment is still turning over a handsome profit for BMW today. The cost of all new plant in the UK – even if it was for BMW and Rover use was written down against Rover to make it look like Rover and Rover alone are haemorrhaging cash – even though the investment was corporate wide. What happened to the “disappeared” Rover R30 project which looked remarkably like the later 1 series? Why wasn’t that part of selling Rover if they wanted Rover to succeed? BMW charged Rover internally more for BMW parts than they charged BMW departments. Buying Rover saved BMW from hostile takeover from the likes of Ford, BMW wanted a prestige small car badge so as not to sully their brand with (essential) front wheel drive hatches.

    The k-series was fixed for peanuts by the Chinese spending a few hundred grand at Recardo engineering – why did BMW not invest? Did they want Rovers to break down? Why did they question the future of Rover at the launch of its most important car in a generation?

    Post BMW, Rover were left without the jewels in their crown – MINI and Land Rover, no land to speak of, Rover write-down R30 “disappeared” and one good car with an under-developed, over-stretched unreliable engine and apparently BMW weren’t asset strippers?

  61. Steve, above –

    A very negative slant on BMW’s management and later disposable of Rover. Not saying I disagree – I have thought similar before now reference BMW not leaving Rover with R30 and BMW keeping and still yielding a good income from much of their investment. BMW doubting the future of Rover at the 75 launch is incredible – a time which should have signposted a financially self supporting Rover, a successful Rover.

    Some interesting points I hadn’t thought of too eg the allocation of costs to Rover.

  62. Re 65: Sorry to disabuse you, but I was one of those ‘horse’s mouths’ there when the body was pulled and taken to Munich.

    We all have different points of view.

  63. Cropley on cars: the lasting effects of the BMW-Rover deal
    BMW’s ownership of Rover is often viewed as a failure, but the deal had a lasting influence on the UK’s automotive industry

    It’s 20 years since BMW bought Rover, an anniversary that encourages discussion about whether the deal, usually seen as a failure, was a catastrophe or boon for Britain.

    It certainly cost BMW prestige and big money back in 2000 when it withdrew from Rover, but you could hardly say it has since held the company back.

    My own view is that though BMW’s withdrawal led to the Phoenix Four’s well-publicised shenanigans, the Germans’ purchase was a large stroke of luck.

    BMW may not ultimately have been able to convert Rover into its UK outpost (a peculiarly hands-off early management style seems to have been one cause) but it left behind important industrial values and procedures that have been beneficial ever since.

    It certainly made a better custodian than Honda — at the time a 20 per cent shareholder — would have done, always assuming the Japanese had been willing to take the helm, which they weren’t.

    BMW backed, promoted and ultimately modernised the Land Rover Freelander, a model that pioneered an enormously important new global market sector and helped Land Rover begin the expansion it still enjoys.

    It built the Rover 75, the last and best-ever Rover. It built the Hams Hall engine plant, now vital in the BMW firmament. And it had the foresight and creativity to dream up the New Mini project, whose potential many of us (me included) failed to recognise at its outset.

    It is deeply ironic today, as UK annual car production forges past 1.5 million, that The Independent’s headline on the day of the BMW purchase read: “Car making tradition dies with the BMW deal”.

    It didn’t, of course. Back in 1994, Rover sold 360,000 cars around the world, a steep decline on the previous year’s performance, and lost money on every single one. Industry-watchers knew in their bones the company was finished.

    Next year, Mini will sell 300,000 profitable cars, the vast bulk of which will be built at Plant Oxford. Or Cowley, as we used to know it. Hard to imagine life without it.

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