The last editorial "Rover to the
dead-end road" aroused some criticism from lovers of MG and Rover.
Some criticized it as base on imagination rather than facts and
figures. Some said it was not right to reward Phoenix’s efforts with
negative comments. Originally I have no plan to respond, but then I
discovered that Autocar magazine gave MG Rover an "Outstanding
Achievement" award in its annual award, and that article was full of
rubbish. I decided to respond.
magazine praised MG Rover "took less than a year to launch the MG ZS, ZR and ZT
saloons, followed soon after by the all-new Rover 75 estate and the
facelifted MG TF sports car."
that’s not bad, but the MG line of sports sedans are no more than tuned
versions of Rover 25, 45 and 75, with breathing-enhanced engines and
stiffer suspensions setting. They even look like tuner’s cars. The same
goes for MG TF. Rover 75 estate was developed in the BMW-era. When BMW
handed over Rover to Phoenix, the 75 estate was already caught
road-testing without disguised. Therefore I don’t see creating them in
short time as a special achievement.
"These have already been
responsible for turning the company’s fortunes around, swelling UK
sales by 2.5% year-on-year."
always reports good news and hide bad news. To shut up those
criticizing me for without showing facts and figures, here I give you
MG Rover’s sales figures in Western Europe, supplied by ACEA - the
industrial organization consist of 13 biggest European car makers:
MG-Rover sales in Western
Cars sold (rounded to thousands)
228,000 (BMW started negotiating selling Rover)
198,000 (Phoenix took over Rover in May)
this year? according to ACEA, sales from Jan to Nov this year amounted
to 130,530 units, down 12% from last year’s 148,369 units in the same
period. Sales of the whole year 2002 is therefore projected to 143,000
is, home country UK is the only market sees sales not dropped, thanks
to the effort Autocar and other British magazines which help creating
an image of revival - Autocar even used advertising-style of strong
phrases such as "this
has to rate as one of the biggest comebacks in automotive history."
However, if we minus domestic sales from the above Western Europe
figures, we may see sales dropped by as much as 25%* in Mainland
Europe! this is by all means a crisis.
worldwide sales? MG Rover is very weak in markets outside Europe.
According to my 1998 data, some 80% of the MG and Rover-brand cars were
sold in Western Europe. If this ratio remain unchanged, we can see this
year the company will sell under 180,000 cars worldwide.
industrial analysts agree that a non-premium-brand mass production car
maker needs to produce 2 million or more cars per year in order to
survive while remain independent. MG Rover now produces less than
one-tenth of that amount. More alarming is that it needs 4 different
platforms to do 180,000 cars - the Rover 25, 45, 75 and MG TF. You can
see how weak the demand each model has. When demands drop, component
prices increase. Also, the factory cannot utilize maximum efficiency.
They are therefore impossible to be profitable. For comparison, most
other European car makers, such as Renault, PSA and Volkswagen, need 6
platforms to achieve annual volume of 2-3 million cars.
will be a hard year to MG Rover. Apart from the image-ruining Tata and
the low-volume MG SV, it won’t launch any new cars. Both Rover 25 (MG
ZR) and 45 (ZS) are very outdated now. Demands of the 75 will continue
to slide, as its rivals get stronger and stronger. The Longbridge plant
will inevitably layoff workers.
see the replacement to Rover 45 (based on TCV concept). MG has no
concrete plan yet for the replacement of 25 (may be terminated) and 75.
Even the replacement of MG TF is still uncertain. MG Rover seems lack
of cash to develop these cars, so it is desperately finding a partner
to share development cost and platforms. Unfortunately, time and cash
reserve are running out. The judgement day will be in 2004.