Friday, April 08, 2005

Tata's partner Rover collapses in UK

Financial Times: Rover collapses as deal fails

MG Rover is a UK based car manufacturer.

Rover Company Ltd. started in 1904 as an automobile manufacturer. Over the last 100 years it has changed several hands and reached the hands of BMW, the German automobile company in 1994. With recession all around in Europe, BMW decided to dispose off Rover in piece-meal. However this became an emotive issue in UK as BMW planned to close down the manufacturing plant in Longbridge, UK.

It was then that another consortium called Phoenix Consortium, with the support of the UK Government, agreed to buy the Longbridge plant and license certain Rover brands from BMW for a mere UKP 10, in 2000.

Phoneix/MG Rover then entered into an agreement with Tatas to import Tata Indica to UK and sell it under the brand name of "City Rover". This project was a bit shaky in the end of 2004 when there were noises from Rover side that the quality of the cars were not that great. The expected number of pieces did not sell. Rover was also looking at a close cooperation with a Chinese automobile company called SAIC (Shanghai Automotive Industry Corporation). Ratan Tata, while in South Africa, made some statement to the effect that he will take a relook at the agreement with Rover, if they were getting closer to SAIC. But then both issued a joint press statement that all was well with their City Rover project.

But within four months of that statement, MG Rover has gone into receivership. Tata's cars won't sell anymore in UK, perhaps after this month.

But would the Tatas be interested in acquiring Rover's Longbridge plant? They can get it for real cheap now. They could look at using the plant to directly produce and market own branded cars (Tata Rover)?


  1. If Rover couldnt sell a Tata badged as a cityrover do you honestly think they could sell Tata Rovers in the UK.

  2. I think the TATA should acquire rovers plant in UK because we are growing in forms of economy and also techonology, soon we will leave back the flaws and come up to the standards in Europe.
    Once we start in EU we are compelled to keep up to the standards and consumers demand.So in a way the TATA is going to become much more competitive in the world of Cars.