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MG Rover's success lies in 'cutting production'

MG Rover could help secure its future by making less cars

Motor industry expert and Warwick Univeristy professor, Lord Bhattacharyya, says Longbridge can continue to cut its losses by streamlining production. He said MG Rover had no need to panic - despite racking up annual losses of tens of millions of pounds.

"Losses have come down because they are producing less cars. If you are producing less cars, you do not have to fork out for the production of those cars, and your losses will be much lower.

"MG Rover is not going to shut down overnight. It is only when you risk your own money and you get into a debt situation that things get serious - there is no need to worry at this stage."

Longbridge has dramatically reduced its losses in the four years plus since the May 2000 takeover, with the car firm losing over £100 million in 2002 compared to over £700 million in BMW days.

"I am not pessimistic. They have a good distribution business, they have a good finance business - they can bubble along for a long time," said Lord Bhattacharyya.

"They may be losing money but they are not in debt. There will not be an abrupt closure."

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