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MG Rover: 'parts chaos is solved'

MG Rover says it is resolving the parts shortages that brought chaos to dealers' service and repair departments this summer, despite claims to the contrary.

The problems began after MG Rover's aftersales distribution contract was transferred in March from Unipart to Caterpillar Logistics. Unipart had run the business for many years. But the operation appears to have run into trouble shortly after the changeover to Caterpillar, resulting in widespread parts shortages at dealerships.

In June, MG Rover halted car production for a week in an effort to resolve a crisis that by this time threatened to damage customer relations. Most of the 3300 workers at its Longbridge site laid down tools for a week, allowing components produced by suppliers to be diverted for use as spares.

Since then, says MG Rover PR director Stewart McKee, the situation has improved.

“The production halt on the car lines made a big difference,” he says. “We have had a team working around the clock to remedy the situation. We are now getting much better feedback from dealers.”

The company has gone on the offensive against reports suggesting its parts operations are still facing huge problems. It says lawyers are looking at an article in September's EuroBusiness magazine which claimed MG Rover's parts contract may revert back to Unipart.

A spokeswoman for Unipart said it could not comment on the story, and that it still maintained a business relationship with MG Rover providing warehousing facilities.

The distribution of spare parts is worth an estimated £250m a year to MG Rover, with operating margins on components close to 10 per cent compared with 2 per cent in car manufacturing. The decision to move from Unipart to Caterpillar was taken when Rover was owned by BMW.

“We have been through a period of major transition, and a very difficult period for component suppliers,” said McKee. “The stoppage in June was the peak of the problem. We are not getting anything like the same level of dealer alarm now.”

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