When Rover succumbed to the charms, and 800m allure, of BMW more than two years ago the chairman of the German company stated that both marques would remain independent.
“The independent management of both brands is the most important prerequisite for the success of this new deal,” said Bernd Pischetsieder (MW February 4 1994). “It is our objective to guide two independent and powerful automobile manufacturers on a common route through the future in a competitive world market.”
But in the past 12 months BMW’s head of research Wolfgang Reitzle has been brought in as chairman of the Rover Group; Rover’s UK chief executive John Towers has resigned amid speculation that he was unhappy with the new management; and last week its former managing director of sales and marketing John Russell quit.
Russell resigned after months of uncertainty. His role was handed to another BMW protege Tom Purves – the former managing director of BMW UK in July. And Russell has been in a no-man’s land ever since, handling project work for BMW and linked with a role in emerging markets.
Yesterday (Tuesday) Martin Runnacles, Purves’ marketing director at BMW UK, joined the one-way exodus and moved across to take the same position, with a bigger budget and a brief to inject more life into Rover. He replaces Rod Ramsay, another Rover veteran, who has become dealer development and projects director within the Rover Group.
All the key management and marketing roles at Rover are now occupied by BMW people. The “independence” Pischetsieder spoke of as central to the success of the deal in 1994, if not wholly surrendered, appears to be under intense pressure.
“I have to admit that it came as a bit of a surprise,” Russell says of his departure, “but the general background with the two companies sharing experience made it less surprising. I have spent the past few months debating whether I wanted to swap into BMW but ultimately I decided that I did not.”
Sources suggest that the corporate musical chairs has not yet ended, although the major roles are now occupied.
In the same 12-month period the car maker has sought to revamp its product range, recorded losses of 152m which have led to a fall in BMW profits and lost market share in the UK. The implication of the managerial changes is that BMW has run out of patience with Rover – a point denied by the German manufacturer which says that it never expected profits from Rover until the turn of the century.
Added to the general confusion, at least for outside observers, is the role of Robin Wight, chairman of advertising agency WCRS, which has handled the BMW account for more than 15 years. Now a senior adviser to the Rover board, Wight, a close adviser to Purves, “consults” on all Rover’s advertising created by Ammirati Puris Lintas.
Wight’s role has heightened speculation about the future of the 100m Rover account which has been of interest since Kevin Morley won the business four years ago and launched his agency, Kevin Morley Marketing, on the back of it. The then SP Lintas picked up the account when it bought KMM in June 1995 but its hold has been in question ever since.
Critics have suggested that recent ads, especially those in the “relaxation” series, including the son taking his father around Ireland, were poor executions. But Russell defends the recent campaigns.
“If you have a strong brand even moderately good ads would be seen in a good light. But if the brand is struggling to express itself, and I don’t say that Rover is, the ads tend to be judged in a more critical fashion,” says Russell.
Effectively he is accepting that there is confusion over the Rover positioning and that it is the priority which needs to be addressed by the new regime of Purves and Runnacles.
“Rover is in a transitional period,” says Russell, “where its product has improved faster than the brand has developed. The Rover brand is lagging behind the technology but the next generation of products will give the opportunity for distinctive positioning as part of the BMW portfolio.”
Any new all-singing and dancing son of BMW/Rover is several years away. And so Rover has to concentrate its attention on its existing product range which has been revamped over the past 12 months – the Metro became the Rover 100, the 200 series was launched and the MGF sports car was given more emphasis.
But the range still has a sluggish appearance. It is identified with cheap and compact cars such as the Mini and Metro, rather than for instance its 600 series. And still has the albatross of “expensive” prices around its neck in the most competitive car market that anyone can remember.
Two years ago BMW said that the independent management of BMW and Rover was all important to the success of the 800m deal. And it has stuck to its word. There are separate managements at the two companies – they now just happen to be dominated by BMW.