Alarm as MG Rover sales slump

By JAMES MCLEAN
Updated:

 

EMBATTLED MG Rover's share of the crucial March new sales market has slumped - a worrying sign for Britain's last major carmaker. Industry statistics today showed that MG Rover last month sold 15,047 cars, which was 1,855 fewer than a year ago.

At a time when the group is looking to cut costs by starting production in Poland, the figures are likely to set alarm bells ringing for the 5,000 workers at its Longbridge plant in the Midlands. A further 25,000 UK jobs are thought to depend on supplying the operation there with components.

The almost 14% slide in sales over its more significant Rover brand is particularly grim as March is the start of the new 2004 registration season. Fewer than two in every 100 new cars sold carry the Rover badge. The MG marque slid by 6.57%.

The month is crucial for motor manufacturers, which expect to do almost a fifth of their annual trade in this period.

Rover's latest decline follows intense speculation about the group's structure and criticism of some of the executives who bought the loss-making firm from BMW for a token £10 in 2000.

John Towers, chairman of MG Rover parent company Phoenix Ventures, and Peter Beale, his deputy, were last week questioned by MPs who accused them of 'financial sleight of hand' in their running of the firm.

Towers, Beale and two other managers, Nick Stephenson and John Edwards, have come under fire for netting millions of pounds from their financial engineering of the group. The executives argue that they invested their own money into Rover and the payments reflect the high risk in taking on the firm.

The management team has slashed the firm's losses but it was still £111m in the red last year. It has been ring-fenced from some of Phoenix's other business units. MG Rover is now not expected to make a profit until 2006.

Its poor sales performance came during an otherwise stunning month for the motor trade with registrations rising 6.6% to a record 466,955 vehicles worth £6.5bn. Fleet sales were especially buoyant.

The Society of Motor Manufacturers and Traders, which compiles the numbers, had forecast a slight decline in new car sales this year but said that the market was 'surprisingly strong', and it was close to upgrading its 2.5m forecast for this year's new car sales.

'We could be looking forward to a fourth consecutive record year for the new car market,' said chairman Sir Christopher Macgowan.

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