Fleet News

Rover sale: new links with manufacturers?

ROVER'S new owner Phoenix must forge links with other car manufacturers to ensure its future in fleet following the sell-off by BMW. The alliance call comes from corporate sales director Trevor Houghton-Berry, who says it is crucial the consortium of business leaders led by former Rover chief executive, John Towers, establishes partnership links.

The most likely suitor is Honda, with whom Rover had an alliance in the late 1980s/early 1990s, although Towers said that other manufacturers would be knocking on its door. The news broke on Tuesday that Towers had signed a deal with BMW giving Phoenix complete control of the Rover car group and safeguarding thousands of jobs at Longbridge and UK dealerships for the nominal purchase price of £10 - speculation that BMW had given Phoenix £500 million has been neither confirmed nor denied.

Towers said at a news conference announcing the deal that Rover was not to become a niche or prestige brand and it was not a Phoenix priority to get Rover back into the fleet top three. He was, however, critical of BMW's strategy. 'BMW had a clear and definite strategy which was to take Rover upmarket in the way that it had taken BMW upmarket 35 years ago. We will not be following that,' he said. He would not be pressed on plans for an R30-type 25/45 replacement, but hinted that the MG badge would be used on sporty versions of the current small/medium car.

Meanwhile, Houghton-Berry has vowed to keep fleets informed. He said: 'I will make it my urgent priority to meet with Towers and then pass on the short and long-term plans for Rover in fleet to our loyal customers. But for an ongoing relationship to be successful, we must have plans for new models and Phoenix will need to get support from another manufacturer to help them with that task.' The 25/45, Houghton-Berry said, must be replaced on schedule in 2003. He also welcomed renewed support from Phoenix for the 75 estate.

Under the BMW deal Phoenix will take over production at Longbridge of the 25 and 45, the MGF sports car and the current Mini. Rover 75 production will move from Oxford to Longbridge. This week's agreement follows the collapse of Rover's sale to Alchemy Partners but up to the last minute acceptance of the Phoenix proposal had appeared doubtful. In a last ditch attempt to secure a funding gap Phoenix is understood to have arranged to sell all Rover's 30,000 unsold cars to an American bank, First Union of North Carolina, in return for £200 million, having failed to gain backing from any UK-based banks.

The Retail Motor Industry Federation, which represents 300 Rover dealerships in the UK, has welcomed the Phoenix buyout but is pressing for full details of the new owner's plans.

Alan Pulham, the RMI's franchised dealer director, has called on Phoenix to immediately tell Rover dealers how their businesses are likely to be affected. He said: 'Phoenix is clearly making a massive investment in the development, production and distribution of Rover and this investment must surely include the future of the dealership network in the UK. BMW has said the deal will prevent the loss of thousands of jobs in the retail business and it is vital the dealers see evidence of this as soon as possible.'

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