The History Of Rover

MG Rover was the last domestically owned mass-production car manufacturer in the British motor industry. The company was formed when BMW sold the car-making and engine manufacturing assets of the original Rover Group to the Phoenix Consortium in 2000.

MG Rover went into administration in 2005 and its key assets were purchased by Nanjing Automobile Group, with Nanjing restarting MG sports car and sports saloon production in 2007. The Rover marque, the ownership of which had been retained by BMW, was sold to Ford, who had bought the Land Rover company from BMW in 2000. The rights to the dormant Rover brand were sold by Ford, along with Jaguar Land Rover, to Tata Motors in 2008.

MG Rover was formed from the parts of the former Rover Group volume car production business which BMW sold off in 2000 due to constant losses and a declining market share. BMW had acquired the Rover Group from British Aerospace in 1994 and had since sold the Land Rover business to Ford, and split-off the MINI business as a new BMW subsidiary based in Cowley. MG Rover took control of the remainder of the former Rover Group volume car business, which was consolidated at the Longbridge plant.

Phoenix Consortium ownership

When BMW sold off its interests, MG Rover was bought for a nominal £10 in May 2000 by a specially-assembled group of businessmen known as the Phoenix Consortium. The consortium was headed by ex-Rover Chief Executive John Towers.

When Phoenix Consortium took over, their first loss for the last eight months of 2000 were reported to be around £400M. By 2004, the company had stemmed the losses to around £80M but never got to the chance to achieve a profit.

MG Rover's best year for car sales was their first full year of business, in 2001 — when they sold over 170,000 cars. In the year of 2004, their sales had declined to around 120,000, a steep decrease of 50,000.

The company eventually ceased trading on 8 April 2005 after having debts of over £1.4 billion and their proposed deal with SAIC collapsing.

Aborted deal with SAIC of China

In June, 2004, it was learned that Shanghai Automotive Industry Corporation had signed a joint venture partnership to develop new models and technologies with MG Rover. This led to much speculation among the British media suggesting the Chinese company was poised to launch a takeover. Later that year, in November, news broke of an agreement between the two companies to create a joint venture company to produce up to a million cars a year, with the production shared between MG Rover's Longbridge site and locations in China. SAIC were to have a 70% stake in this company in return for a £1 billion investment, with MG Rover owning the remaining 30%. However, this agreement had to be ratified by the Chinese government, specifically its National Development and Reform Commission (NDRC).

The Commission held the opinion that if BMW could not make a success of Rover, then it would be hard for SAIC to do so.

On 8 December 2004, Tata of India, which had cooperated over the export of the Tata Indica as the CityRover, threatened to cease its agreement with MG Rover if the SAIC tie-up went ahead, according to the Indian press. Tata claimed the report was inaccurate two days later.

SAIC did purchase the technical rights to manufacture Rover's 25 and 75 models, and for the Powertrain Ltd business, for £67M. It did not acquire the Rover name, which was still owned by BMW at the time (See 'Brands' below).

In January 2005, it was revealed that British Prime Minister Tony Blair had intervened to support the alliance between MG Rover and SAIC. MG Rover could not give a date on which the agreement would be finalized.

Figures released by the company showed that the sale of Rover-branded cars fell in 2004 compared to 2003.

In April 2005 it was reported that the partnership deal with SAIC was in trouble because the British Government had decided to withdraw its offer of a £120 million loan to keep the deal going. On 7 April 2005 the company announced that it was suspending production because of component shortages. Later in the day, it was announced by Patricia Hewitt, the Secretary of State for Trade and Industry, that the company was being placed in receivership. Her statement was based on a conversation with MG Rover chairman, John Towers. It was later denied by MG Rover Group, although the company admitted that it had engaged PricewaterhouseCoopers, the accountancy firm, to advise on its current financial situation. In the event, MG Rover placed itself in administration on 8 April 2005, a different status from receivership under British law.

On the afternoon of 8 April 2005, British Prime Minister Tony Blair and Gordon Brown, the Chancellor of the Exchequer, and Richard Burden, Labour M.P. for Birmingham Northfield visited Tony Woodley at the offices of the Transport and General Workers' Union in Birmingham and stated that there might be some hope for the future of the company, although not the original deal agreed with SAIC. In the media, any news about MG Rover was overshadowed by the Pope's funeral and the problems of the register office marriage of the Prince of Wales and his bride.

On 10 April 2005, MG Rover announced that they had received a £6.5M loan from the British Government. This would cover worker wages for one week while buy-out proposals were made to SAIC. The same week, SAIC denied it had ever made an offer to buy MG Rover and threatened to sue anyone who attempted to make the 25 and 75 models.

Financial ruin

On 15 April 2005, it was announced that SAIC had once again rejected pleas to buy out the company. With no other rescue deal in the pipeline, the administrators were not in a position to seek further funding from the government and announced that redundancy notices to Longbridge staff would be issued.

By the end of April 2005, Sir Richard Branson had reportedly expressed an interest in buying the remaining assets of the company for the purpose of reviving the marque in order to enter the hybrid automobile market, and several other parties were also rumoured as wishing to buy the remnants. These included two Russian businessmen, although one of them denied any interest in buying the company's assets. The Iranian state-owned car manufacturer, SAIPA who had worked with MG Rover installing the K series engine in a car for the Iranian market that was based on the old Mazda 121 and Kia Pride, were also rumoured to be potential buyers.

SAIC had claimed that it had already acquired Intellectual Property Rights in some Rover product for £67million in the autumn of 2004, including the Rover 25, the Rover 75 and the Rover Powertrain K-series engine, but the Administrators advised that there was still interest in saving some other parts of the company, including MG, and 13 May 2005 was set as the deadline for bids from potential investors.

On 20 May 2005, the Administrators announced that, after considering numerous proposals, they had entered talks with two unnamed "overseas companies" with a view to restarting one or more of the Longbridge production lines. Nevertheless, the following week they informed creditors that they by then expected the company to proceed instead to a creditors' voluntary liquidation, setting the date for a preliminary Creditors' Meeting to be held in Birmingham on 10 June 2005. At that meeting, creditors learned that so little of value was left in the company that there would probably be negligible or even no repayment of its outstanding debt and that, although three bidders were then still negotiating to acquire the company intact as a going concern, the Administrators had instructed their agents to prepare for the piecemeal sale of the very few remaining assets in the event that satisfactory negotiations for the sale of the entire business were not concluded.

On 14 July 2005, it was reported that Magma Holdings, a financial group including former Ford Motor Company and General Motors executives, working in conjunction with SAIC, would be making an offer for the assets of both MG Rover and engine maker Rover Powertrain which, if successful, would see at least some production being restarted at Longbridge, and that talks with the other two interested parties– China's Nanjing Automobile Group and Project Kimber (a consortium of Birmingham businessmen led by David James)– were still in progress.

On 18 July, Magma Holdings and SAIC formalized their bid with a reported offer of £60M, with a number of additional conditions. However, that offer was not well-received and on 22 July, the Administrators announced that the principle remaining assets of the group had been sold to the Nanjing Automobile Group for around £53M, with a deposit of around $5M. Nanjing Automobile Group indicating that their preliminary plans involved relocating the Powertrain engine plant to China and splitting car production into Rover lines in China and MG lines in the West Midlands (though not necessarily at Longbridge), where a UK R&D and technical facility would also be developed. But on 27 August, The Daily Telegraph reported that the balance of around £47M, due on 22 August had not been paid. Citing confidentiality, the Administrators declined to comment.

Nanjing Automobile started shipping equipment from Longbridge to China on 15 September and, according to a report in The Times on Saturday, 17 September, were close to a deal with SAIC under which they would manufacture the Rover 25 and Powertrain engines while SAIC would produce a stretched Rover 75. Nanjing Automobile Group was reported to be in exclusive negotiations with GB Sports Cars, a venture by former Rover managers, to re-establish MG production at Longbridge.

In late October, key ex-workers received letters from Nanjing Automobile Corp offering 10 months' work dismantling plant at Longbridge for reassembly in China while talks with GB Sports Cars continued. However, after announcing that the UK government had not offered any substantial assistance in either grants or loans, Nanjing Automobile was also reported to have begun negotiations with at least two other potential partners, including "a wealthy San Francisco family", and, in early November, Nanjing committed to making every effort "to resume production [at Longbridge] at the beginning of 2007".

In the autumn of 2006, Nanjing announced plans to build three new MG model ranges with a view to begin production by the end of 2008. It was also revealed that the Austin marque, last used in the late 1980s, may be revived on some cheaper versions of the MG range.

The MG Rover range initially consisted of just five cars: the Mini, Rover 25, Rover 45, Rover 75 and MG F along with car-derived van derivatives of the 25. The Mini was only built under temporary licence during the first five months of MG Rover's existence, and since the 1980s had only been built in limited numbers. After production finished, previous owner BMW regained the rights to use the brand, and did so on an all-new car that was launched in 2001: MINI.

The Rover 25 and Rover 45 were recently facelifted versions of visibly ageing mid-1990s designs, but production figures had been slightly decreased due to a fall in demand, even though the Rover 25 had been Britain's best-selling car of the month in April 2000. The acclaimed Rover 75 was little over a year old, and after a slow start sales were rising. An estate version was launched following the shift of production from Cowley to Longbridge. The replacement for the MG F, the MG TF sports car was, inevitably, a relatively low-volume product, but it had consistently been the most popular car in its sector since its 1995 launch.

The Rover 25 and Rover 45 endured disappointing sales throughout MG Rover's existence, though their MG ZR and MG ZS sports variants proved popular from their launch in 2001. The Rover 75 and its MG ZT sports variant enjoyed more popularity.

The range further expanded in 2003 with the launch of the smallest model, the Indian-built CityRover, built as part of a venture with Tata, and a flagship model, the MG XPower SV, based on the Qvale Mangusta. Both cars, however, failed to achieve the sales figures that MG Rover had hoped for.

Ultimately, MG Rover were building more cars than they could sell, and this was a key factor in the firm's bankruptcy in April 2005. Stocks lasted for some two years afterwards, with the last MG Rover cars not leaving showrooms until around the time of Longbridge's re-opening by new owners Nanjing Automobile.

  • Spring 2000: MG Rover was formed as the part of the former Rover Group's mass-market car business which BMW sold to the Phoenix Consortium for a nominal £10
  • 2001: MG Rover bought Qvale of Italy for an estimated £10million (Only bought the factory and the rights of platform of the Mangusta car. MG Rover did not acquire the rights of the Qvale name)
  • 2001: The MG ZR, MG ZS and MG ZT (based on the Rover 25, Rover 45, Rover 75 respectively) are launched as sporting alternatives to the standard Rover models.
  • 2002: MG Rover agrees to collaborate with Tata of India.
  • 2002: MG Rover also goes into talks with Brilliance China Auto with plans to build MG Rovers in a plant in China
  • 2003: MG Rover launches the new MG SV and SV-R, prices start at around £65,000. The car is based on the Qvale Mangusta and uses the Ford 4.6 litre V8 engine with two different power outputs.
  • 2003: MG Rover launches the new CityRover - a small 5 door hatchback city car which was the product of 2002's collaboration with Tata Motors. It was first sold as the Tata Indica in 1998.
  • 2003: MG and Rover launches V8 variations of the Rover 75 and the MG ZT
  • 2003: MG Rover launch a rugged version of the Rover 25, the Rover Streetwise
  • 2003/ 04: MG Rover sell the Longbridge factory to St Modwen on a lease-back basis to raise funds.
  • 2003/ 04: MG Rover launches its facelifted models.
  • 2004: MG Rover enters in talks with Shanghai Automotive Industry Corporation SAIC about a possible collaboration.
  • 2004: Plans for a diesel-powered, more equipped and better priced Rover CityRover range were announced. Due to launch late-2005.
  • 2005: The proposed collaboration Shanghai Automotive Industry Corporation SAIC collapses, forcing the company into administration.
  • 2005: Nanjing Automobile Group acquires the entire assets of MG Rover.
  • 2005/ 06: Nanjing Automobile Group announces plans to build cars at Longbridge after signing a deal to lease the site for 33 years. Also Nanjing Automobile Group is to build an American MG factory, believed to house the future MG 3 and 5 series models.
  • 2006: SAIC sets up a new company called Roewe after losing the right to buy the Rover brand name, and now builds a car based on an extended Rover 75 platform called the Roewe 750.
  • 2006: Ford buys the rights to the Rover marque, meaning that only the MG badge will be used on the new range of Nanjing-built cars. Nanjing announces the possibility of relaunching the Austin marque for a new generation of cars which are planned for a launch sometime in 2008.
  • 2007: Nanjing Automobile Group restarts MG TF production at Longbridge and in China before the end of July, but says that no cars are expected to leave the factories until at least the spring of 2008.
  • 2007: SAIC and Nanjing Automobile Group announce a tie-up and a possible merger which is completed on 26 December.
  • 2008: Longbridge Plant re-opens on 1 August, with production of NAC MG TF LE500 commencing.

MG Rover sponsored Aston Villa Football Club from 2002 to 2004, with Villa's home kit advertising Rovers and the away kit advertising MGs.

All of the following brands were controlled by MG Rover, and were formerly the property of British Leyland.

  • 1895 Wolseley
  • 1905 Austin
  • 1912 Morris
  • 1913 Vanden Plas as a coachbuilder and as a car brand (outside the US & Canada)
  • 1923 MG was created by Cecil Kimber based on Morris components
  • 1930 American Austin a brand name created by Austin for US market
  • 1947 Princess was created by Vanden Plas as a luxury car name
  • 1987 Sterling created as a separate brand in the US by the Rover Group

The Rover brand was used under license from BMW, and was sold to Ford following the collapse of MG Rover; it was subsequently bought in 2008 by TATA.

The new "MG XPower" brand was created by Phoenix for the X80 project, the XPower SV, a higher powered version of the Qvale Mangusta-based sports car; The car is now built by MG Sports and Racing Europe Ltd, a separate company set-up by William Riley following his purchase of the remains of MG Sports and Racing from PWC, the Administrators. However, his the ownership of the MG XPower brand does appear to be in doubt as NAC / SAIC also claim to have ownership of the MG XPower brand, together with rights to the MG brands itself. The issue is likely to be resolved via a high court case likely to be heard in 2009.

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