MG Rover loses £77 million

Thursday, October 28, 2004

MG Rover lost £77 million last year but hopes to break even late in 2005 and says new models are on the way to help it return to profitability.

Indian-built CityRover's sales have not reached planned levels

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MG Rover lost £77 million last year but hopes to break even late in 2005 and says new models are on the way to help it return to profitability.

The Phoenix Consortium, which owns the Midlands-based manufacturer, announced its financial results today and said it has managed to reduce losses every year for the past four years. Figures for 2003 show an £18m improvement over 2002.

The company says it will sign an agreement to develop new models with Chinese manufacturer Shanghai Automotive Industry Corporation early next year.

Replacements for the Rover 45 and MG ZS mid-sized hatchbacks and saloons will be the first priorities and are expected early in 2006. The manufacturer pointed to dwindling sales of these two models as one reason for continued losses last year, despite improved sales of the Rover 75, MG ZT and MG TF convertible.

Having previously defended the success of the CityRover earlier this year, the company now admits that sales volumes of this model have not reached planned levels.

Introduced late in 2003, the CityRover is built in India by Tata and based on the Indica city car. MG Rover says it is currently undertaking a ‘comprehensive review’ of the model.