BMW is over Rover

Milberg: We have learned from the Rover experience

BMW says it has "drawn a line" under its losses from Rover group and predicts profits and sales will grow this year despite the slump in the global auto market.

At its annual news conference, the German luxury car maker said its involvement with Rover will have cost it a total of 4.1bn euros (£2.56bn, $3.68bn), slightly below the 4.6bn it estimated last year.

The figure includes provisions of 3.15bn euros, proceeds from the sale of Land Rover to Ford, and 762m euros in Rover operating losses for the first half of 2000, before it was sold to the Phoenix consortium.

We are now in the position to draw a final financial line under the Rover involvement.

Helmut Panke
BMW's Chief Financial Officer

"These provisions also include all obligations resulting from issues and matters still outstanding with the Phoenix Consortium and the Ford Motor Company," Chief Financial Officer Helmut Panke said.

"Even though there are still some open points to be negotiated with the Phoenix Consortium and Ford Motor Company, we are now in the position to draw a final financial line under the Rover involvement," he said.

"Further costs will not arise in this context."

Good sales ahead

BMW said preliminary data showed sales in the first quarter of 2001 rose by more than 8% to 219,000 vehicles.

"I am confident that the BMW group will succeed in increasing deliveries, sales and profits throughout the whole of 2001," said Chief Executive Joachim Milberg.

He said there was a degree of uncertainty about developments in the US market, but viewed the economic situation as a short-term phenomenon rather than a long-term trend.

BMW hopes the new Mini will add to its sales figures

The company confirmed a 55% increase in net profit last year helped by strong car sales, particularly of its 3-Series and of its X5 in the United States.

Milberg said investments which in the past went into Rover will now be redirected to expand the BMW brand, including the Mini and the Rolls-Royce product range.

"We won't delete the Rover lesson - we have learned a lot from the Rover experience," said Milberg.

BMW will launch the new Mini in Britain on July 7 and elsewhere in Europe soon after.