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Friday, 6 October, 2000, 14:18 GMT 15:18 UK
MG Rover cuts prices
new car
Buyers could save up to 19% on new cars
MG Rover has become the latest car company to cut its prices for UK customers.

It is to knock up to 19% off the price of new cars, it announced on Friday.


These latest actions demonstrate once again MG Rover Group's commitment to offering customers both clarity and value for money

Kevin Howe, MG Rover chief executive
Buyers of some Rover 25s could save as much as 1,500, while buyers of certain Rover 75 models could save as much as 2,500.

The news follows poor sales figures in September, when Rover's share of the market slipped to just 3.68%, compared with 6.04% in September 1999.

Three year's free service

The reductions are on Rover, MG and Classic Mini cars, and owners of Rovers will get three years free servicing for vehicles bought and registered during the last three months of the year.

It is Rover's second price cut this year. Shortly after buying the company from its German parent BMW, the new owners announced sharp discounts in an attempt to regain marketshare.

This did indeed push up Rover's sales for a month or two, but since then sales have been plummeting again.

Price cuts all round

Earlier this week, Ford cut up to 13% off the price of some of its cars. Honda, Mercedes, Land Rover, Audi and others have also cut their prices.

The pressure is now on Vauxhall, the only major car company not to have announced deep price cuts.

Car manufacturers were forced to reduce list prices, after the government introduced regulation to ensure that individual customers would pay the same price as corporate "fleet buyers", who buy in bulk and used to receive massive discounts.

The rules came into force after consumer groups and government officials highlighted the fact that cars cost anything between 10% and 50% more in the UK than the same models in continental Europe.

The Competition Commission said after an investigation earlier this year that it was unhappy with the arrangements car makers had for selling cars.

Proton says 'no' to Rover

While Rover hopes that the price cuts will help to increase its market share, the company is still looking for a partner to secure its long-term future.

The Malaysian car maker Proton, which was rumoured to discuss takeover terms with MG Rover, has now ruled itself out of the equation.

At a visit to Proton's Lotus subsidiary in Norwich, Malaysia's Prime Minister Mahathir Mohamad said there was "no truth in reports that we are going to buy Rover".

The two firms, he said, were discussion to collaborate on building an engine, but there was no question of taking a large stake in the company.

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See also:

04 Oct 00 | Business
End of the Mini
05 Oct 00 | Business
New car sales down
02 Oct 00 | Business
Ford cuts prices
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