The supermini is based on the Tata Indica and is likely to be the first in a range of cars developed in association with the Indian carmaker. It's also MG Rover's first all-new car launch since Phoenix Venture Holdings took control of the company from BMW in 2000 and its first supermini since the demise of the Rover Metro/100 in 1998.
Sales success is crucial, although MG Rover has set fairly modest targets – around 30,000 units worldwide, with the UK accounting for at least half. Privately, however, executives hope to exceed 40,000 a year over the five-year expected lifespan.
“We have not been in the small car sector for some time and there is massive potential below the Rover 25,” says sales and marketing director John Edwards.
Tata chairman Ratan Tata makes no secret of the fact that he wants the relationship with MG Rover to grow stronger, developing new models, engines and transmissions. MG has signed an agreement to sell Tata's Safari and Loadbeta vehicles in the UK through its dealer network, but it is cautious about entering a full-blown partnership.
Executives say they are holding talks with Tata and other Far East companies, although they do now admit that the deal with China Brilliance is foundering.
The CityRover will be launched as a 1.4-litre 84bhp five-door hatch, priced from £6500 to £8500, and will compete against a range of cars, from Ford Ka and Peugeot 106 to Skoda Fabia and Toyota Yaris.
MG Rover says there is “no compromise” on styling, with designer Peter Stevens reshaping the front end of the car. It has also made tuning adjustments to the dampers and suspension for the better handling demanded by European buyers, the majority of whom will be female purchasing as a second car.
The company is confident that Tata's Poona production plant in India will produce cars of a high enough quality to satisfy European markets, pointing out that the factory is new. “The country of origin does not worry people – what's important is the franchise the car is being offered through,” adds a spokesman.
More engine options are likely, including a 1.1-litre entry-level and diesel, possibly using Tata's own unit. An estate is also a possibility – the Indica was shown at Geneva motor show in stationwagon form. MG is also launching the Ford Fusion-rivalling Streetwise, based on the 25, and new entry-level 110bhp 1.6-litre ZS and 120bhp 1.8-litre ZT. The Streewise, an “urban on-roader” inspired by the Audi Allroad and Volvo XC70, is a tacit acknowledgement by MG Rover that it needs to attract younger buyers – targets are 25 to 35-year-olds.
Featuring large wheels and raised platform for greater ground clearance, the Streetwise becomes the first MG Rover to bear the comp-any's new-look logo – a simplified, cleaner version of the viking longship. It will be priced from £9295 and is available with 83bhp and 101bhp 1.4-litre engines, and a 100bhp turbodiesel. A 1.8-litre with manual and Stepspeed CVT transmission will follow next year.
MG Rover is making a sustained effort to win more fleet business with the entry-level ZS 110 and ZT 120 models. It is on target for 26,000 fleet sales this year (2002: 16,000), but this would seem to be at the expense of retail business as half-year figures show total volumes are slightly down at 51,090 units. It hopes the CityRover and Streetwise will help to boost retail business.
Profits remain a few years away. MG Rover needs to sell an average of 200,000 cars a year in order to break even. It's a figure that has been consistently missed and that's a situation unlikely to change until the 45 replacement is launched in some 18 months' time. “When we have the CityRover, the Streetwise and the new medium car, we will exceed 200,000 sales,” says the spokesman.
Worldwide growth will be key. The company this month returned to Japan for the first time since 2000. It is also expanding in Sweden – 1500 sales are expected to grow to 4000 next year – while further afield, Mexico and New Zealand are healthy markets.