Rover pays price of competition

Personalities and politics have coloured the sorry tale of Rover, but the reality is rather more prosaic. It’s another chapter in the overcapacity story, although admittedly a fairly dramatic one. The story’s denouement will almost certainly strengthen, rather than weaken, the hand of car marketers – though sadly Rover is not a brand they are likely to conjure with.

There was a time, not so very long ago, when car manufacturers could avoid the harsh discipline of market competition by waving the flag and scuttling behind the petticoats of national politicians, themselves desperately anxious to preserve jobs in vote-sensitive constituencies.

But the days of jobbery and subsidy are drawing to a close. Car companies have had to get real with globalisation, a force much greater than the often abused “national interest”. Essentially they have done so by huddling together.

In the past few years, for example, almost all the specialist car marques have had to seek a global sponsor’ in order to survive. This has been as true of Volvo as Jaguar, and of Rolls Royce as Aston Martin. Only Porsche remains as a significant independent player, though it has a family relationship with Volkswagen.

Even the Japanese, operating in one of the most protected markets in the world, have had to come to terms. Mazda is now controlled by Ford, while Renault has effectively taken charge of Nissan and put a Frenchman at its head.

But still the problem of overcapacity won’t go away. In Europe it is most acute: perhaps 4 or 5 million vehicles over and above sales of 16 million units. Which is why Rover, the English patient, and its Italian cousin, Fiat, have been attracting such morbid interest.

Fiat, which still enjoys an enviable loyalty in its own market, has achieved a remission by calling in General Motors. No such luck for the Rover marque. It never made much sense as a second-string brand to BMW, which was probably seduced by the possibilities of the Land Rover range at a time when it was weak in sports utility vehicles. The failure of the 75 epitomised BMW’s problems as Rover’s brand steward. Yes, it had a succès d’estime with motoring correspondents and appeared to cleverly exploit the vogue for retro styling. But it was wrongly positioned – too bourgeois, too stuffy, for today’s aspirational market (unlike the S-type Jaguar) – and failed to produce the halo effect BMW so dearly needed to reverse falling sales and mounting debts.

In the end no one in the motor industry wanted Rover, even if it was given away. It made more sense as a sacrificial victim to overcapacity, than a going concern – as long as someone outside the industry could be seen to do the hatchet work that so upsets politicians and voters.

So much for Rover, what of MG Cars, its successor? The new owner Alchemy is developing a specialised sports car brand, and will gradually shed the dowdy saloon cars. But, judging from the Lotus experience, MG is doomed as a standalone marque. Its most likely destiny is a trade sale to one of the global car makers, once the present problems have been sorted out. Mind you, the same could probably be said of BMW…


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