MG Rover has acquired Rover Financial Services from BMW through a newly-formed venture between HBOS and the Phoenix Partnership, called MGR Capital. It has bought the contract portfolio of some 58,000 customers of vehicles leased while under BMW ownership - for a total consideration of £340m.
MGR Capital will manage the financing arrangements relating to the portfolio, and with MG Rover Group, the eventual disposal of vehicles at the end of their finance leases.
Kevin Howe, MG Rover chief executive, said: “This is an important step for the business to take. It puts us in more control of the second hand value of MG and Rover cars, which is a significant benefit to our business and our customers. It also creates many new marketing opportunities for the future.”
Rover Financial Services, under BMW ownership, had been the finance provider for Rover, Mini and Land Rover customers since 1998. Ford acquired the Land Rover assets in a separate transaction in October 2001.
The deal means MG Rover will minimise depreciation on the vehicles by controlling their resale, mainly through its dealers.
It will also enhance customer loyalty by giving the company direct contact with MG Rover drivers.
This will put it in a better position to persuade them to remain loyal to the Rover and MG brands, Kevin How, MG Rover chief executive, said. Stuart Middleton, senior director, product and market development, HBOS said: “MG Rover Group's extensive knowledge of MG and Rover motor cars and the automotive market place will benefit both MG Rover's business and ours.”