MG Rover, which recorded its fourth consecutive loss since being sold for £10 four years ago, said today the 2003 loss had narrowed from £95 million the previous year, and it expected to break even in 2005.
MG Rover is now owned by private equity group, Phoenix Venture Holdings. Phoenix Group chief executive Kevin Howe blamed tough competition on declining sales but said business would pick up next year when the group expects to finalise a cooperation deal with China's Shanghai Automotive Industry Corp.
‘We continue to invest in the development of the MG and Rover brands and to review our cost base as we work towards the planned collaboration with SAIC, announced in June 2004,’ Howe said in a statement.
The company said 2003 turnover fell 4% to £1.67 billion after the volume of vehicle sales dropped 2.4%. The group managed to reduce costs by 18%. MG Rover also confirmed it had abandoned a plan to share vehicle development costs with Malaysia's top car maker Proton after negotiations stalled.
Today, Phoenix said the contribution to the trust fund, which was £12.95 million in 2002, was £3.58 million in 2003.
The company added that in 2002 the highest-paid director received £3.24 million and that in 2003 the top pay was £1.55 million.
It was also announced that Phoenix directors' salaries, including benefits, increased by 1.6% to a total of £2.2 million in 2003.
The Phoenix report to shareholders says: "Once the SAIC agreement has been approved we can expect renewed confidence in the future of the Group and the continuation of MG Rover vehicle production both at Longbridge and elsewhere in the world.
"The latest 2004 models have been well received, but this has not translated into stronger sales because of changes taking place in the UK dealer network.
"Many MG Rover dealers have taken advantage of the new block exemption legislation to add further franchises.
"These dual franchise outlets now account for almost 60% of the network, however, they have achieved lower sales than the remaining solo dealers in 2004.
"The group is stepping up its dealer recruitment activities, both in the UK and abroad: in 2004 some 60 new continental dealers have joined MG Rover and the target is for a further 100 plus for 2005."
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