MG Rover Group was the last domestically owned mass-production car manufacturer in the British motor industry. The company was formed when BMW sold the car-making and engine manufacturing assets of the original Rover Group to the Phoenix Consortium in 2000.
MG Rover went into administration in 2005 and its key assets were purchased by Nanjing Automobile Group, with Nanjing restarting MG sports car and sports saloon production in 2007. During that year Nanjing merged with SAIC Motor (the largest vehicle manufacturer in China). During 2009 the UK subsidiary was renamed MG Motor UK. The MG TF was manufactured at the former MG Rover Longbridge plant and sold within the UK from 2008 to 2010. In 2011 the first all new MG for 16 years (the MG 6) was launched in the UK (assembled at the Longbridge factory). During 2013 a supermini was added to the line up (the MG 3), this went on to help MG Motor become the fastest growing car manufacturer within the UK in 2014.
The Rover brand, which had been retained by BMW and licensed to MG Rover, was sold to Ford, which had bought Land Rover from BMW in 2000. The rights to the dormant Rover brand were sold by Ford, along with the Jaguar Cars and Land Rover businesses, to Tata Motors in 2008.
History
MG Rover was formed from the parts of the former Rover Group volume car production business which BMW sold off in 2000 due to constant losses and a declining market share. BMW had acquired the Rover Group from British Aerospace in 1994 and had since sold the Land Rover business to Ford, and split off the MINI business as a new BMW subsidiary based in Cowley. MG Rover took control of the volume component of the former Rover Group (itself the remaining rump of British Leyland, which in turn had its roots in the even older British Motor Corporation, formerly Austin and Morris), which by now consisted solely of the Longbridge plant in Birmingham. Of the Rover Group's other two major plants; Solihull had already been divested as part of the sale of Land Rover to Ford, whilst the Cowley and Swindon plants were retained by BMW for the production of the new MINI family of vehicles. As part of these changes, all remaining Rover volume production at Cowley (essentially now just the Rover 75 as the Rover 600/800 ranges had already been discontinued by this point), was moved to Longbridge, whilst MG Rover would be allowed to continue manufacturing the original Mini at Longbridge until the new MINI was launched by BMW a year later.
Phoenix Consortium ownership
When BMW sold off its interests, MG Rover was bought for a nominal £10 in May 2000 by a specially assembled group of businessmen known as the Phoenix Consortium. The consortium was headed by ex-Rover Chief Executive John Towers.
When Phoenix Consortium took over, their first loss for the last eight months of 2000 were reported to be around £400m. By 2004, the company had reduced the losses to around £80m but never made a profit.
MG Rover's best year for car sales was their first full year of business, in 2001 – when they sold over 170,000 cars. In 2004 their sales had declined to around 120,000.
The company ceased trading on 8 April 2005, with debts of over £1.4 billion, after a proposed alliance with SAIC collapsed.
In relation to this, accounting firm Deloitte was fined £14 million (US$22 million) in September 2013 for failing to manage conflicts of interest. Deloitte had acted as corporate finance advisers to firms involved with MG Rover and the Phoenix Consortium, including tax advice while Deloitte audited MG Rover. An independent tribunal refused to grant the right to appeal a finding that Deloitte failed to consider public interest, as of November 2013.
Aborted deal with SAIC of China
In June 2004, it was learned that Shanghai Automotive Industry Corporation had signed a joint venture partnership to develop new models and technologies with MG Rover. This led to much speculation among the British media suggesting the Chinese company was poised to launch a takeover. Later that year, in November, news broke of an agreement between the two companies to create a joint venture company to produce up to a million cars a year, with the production shared between MG Rover's Longbridge site and locations in China. SAIC were to have a 70% stake in this company in return for a £1 billion investment, with MG Rover owning the remaining 30%. However, this agreement had to be ratified by the Chinese government, specifically its National Development and Reform Commission (NDRC). The Commission held the opinion that if BMW could not make a success of Rover, then it would be hard for SAIC to do so.