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MG Rover plans sales fight back

The chief executive of MG Rover last night outlined the company's plans for a sales fightback to rebuild confidence in the embattled brand.

Speaking to The Birmingham Post, Kevin Howe said it aimed to win back traditional MG and Rover buyers who were switching to rivals because of fears over the future of the Longbridge company.

In the short term, efforts will concentrate on rebuilding sales of its existing range of cars which have suffered a massive slump over the last year. The company may cash in on two new concept cars - a new MG GT and a Rover 75 coupe - but no decision on whether to put the well-received models into production has yet been taken.

In the long term, sales hopes ride on the "vitally important" proposed joint venture with Chinese carmaker Saic (Shanghai Automotive Industry Corporation) and the new models that would result from it, Howe said.

The Longbridge carmaker has been consistently written off by critics of the 2000 takeover of the business from BMW by a consortium of businessmen led by chairman John Towers.

Since the acquisition by Phoenix Venture Holdings, MG Rover has seen its sales base shrink by about half amid a welter of claims that Mr Towers and his colleagues were enriching themselves at the expense of the business.

The company has also been handicapped by its failure so far to find a partner to share the cost of bringing vital new models to market.

But that will change if the company's proposed joint venture deal with Saic comes off, Mr Howe said.

Group sales in western Europe were 16.5 per cent down year-on-year at just under 100,000 at the end of October, according to figures from Acea, the Brussels-based automotive industry body.

In the UK, Rover sales at the same stage of the year were 23% down at 40,399 and MG was 15 per cent behind 2003 at 28,040.

The group's share of the UK market was down to just over three per cent in October, about half the level of four years ago.

The UK car industry will publish its November sales figures on December 6, but these are not expected to hold any comfort for MG Rover.

"We have had a very bad year for sales and the question is how much can we expect our traditional market share to return," Howe said.

"The issue is one of confidence. We have been consistently pilloried, and if you were a consumer with no particular ties to the brand you would have a propensity to wait before buying one of our cars to see how we get on."

Changes to the European Block Exemption rules to allow dealers to sell more than one manufacturer's cars from the same site have worked against MG Rover in the UK, Howe said.

A "significant number" of MG Rover's UK dealers have taken on new franchises and this had affected sales.

(Source: Birmingham Post)

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