MG Rover cars bounce back

The Rover 75 helps the carmaker move forward

UK customers have begun to return to the troubled car maker MG Rover, according to a report by the Society of Motor Manufacturers & Traders (SMMT).

John Towers wants "quality sales"

The company sold 31% more cars in December than in the same month of 1999, according to new registration statistics.

And although the car maker's sales did fall during the year as a whole - by 5.87% - MG Rover boss John Towers is as upbeat as ever.

"I'm actually more positive about the year [figure] than I am about the December sales," Mr Towers told BBC News Online.

Demand remains strong

Rather than being faced with a slump in demand, Mr Towers insisted that the drop in sales was a welcome part of the firm's push for what he called "quality sales", as opposed to sales where the company loses money.

In May 2000, it was estimated that MG Rover was losing £1,500 on every car it sold.

The industry needed a boost

Christopher Macgowan
SMMT chief executive

In fact, "quite a lot of the actions we've taken during our eight months of ownership have caused us being a little bit short [of some models]," he said.

BMW sold its loss-making subsidiary Rover in spring 2000 for a symbolic £10.

In the UK, MG Rover sold 19,000 Rover 75s, Mr Towers said.

And worldwide, the company sold 205,000 cars in 2000, 42,000 fewer than in 1999, but 5,000 higher than its target, Mr Towers said.

With the forthcoming launch of the new MG sports car, he said he is confident that the company will once again reach its global sales target of 200,000 cars.

2000 good for the industry

Overall car sales in the UK rose sharply last year to reach the third highest level recorded, according to a survey by the car industry.

Rover's sales during the last month of 2000 were the best experienced, with a 27.5% rise over the previous December, according to the SMMT survey.

And with a 42.3% rise in the number of private buyers piling into the car market, it became clear that consumers had been taken in by the UK industry's savage price cuts during 2000.

This was the year when the UK government intervened and introduced legislation aimed at increasing competition in the car industry.

The move, in November, followed an investigation by the Competition Commission, which showed that British buyers were paying on average 12% more than other Europeans for their cars.

The legislation was initially opposed by carmakers, but since then the industry appears to have changed its tune.

"The industry needed a boost and strong competition in the last quarter helped registrations top the previous year, making 2000 the third highest on record," said SMMT's chief executive Christopher Macgowan.

MG Rover's price reductions were at least as decent as those of its competitors, and this obviously aided its sales figures, if not its revenues.

Renewed optimism

About 2.2 million cars were sold in the UK last year, lower than two previous records; the 2.5 million cars sold in 1998 and the 2.3 million cars sold 11 years ago, in 1989.

"We can look forward to 2001 with renewed optimism and reflect on a millennium year that ended with a bang, not with the whimper some people had been predicting," Mr Macgowan said.