Neither Rover's nor Britain's interests have been served by this week's sale of our last leading car-maker to BMW. Rover is no longer an independent manufacturer. Its interests are now subservient to another car-maker's and, what is more, to an erstwhile rival that was losing ground to Rover.

Bernd Pischetsrieder, BMW's chairman, talked about a merger, a coming together of two powerful car-makers. It is nothing of the sort. The ease with which BMW's boss listed his aims for Rover - resurrecting old badges, plans for the 800 range, revamping the Mini, a new baby car - shows who'll be making the important decisions. Everything Mr Pischetsrieder said was as much news to Rover's senior management as it was the journalists at the same press conference.

If, in the future, there is a conflict of interests between BMW and Rover or between Bavaria and the Midlands (as there surely will be), Germany will come first. Britain's motor industry - the makers of brakes and bulbs, tyres and track rods, radios and radiators - depends on Rover. It buys more than pounds 2bn-worth of parts every year, 90 per cent from UK suppliers. It is the biggest customer for the UK component industry, and the latter is responsible for 4.6 per cent of total UK manufacturing output.

The remark made by the Industry Minister, Tim Sainsbury, on Channel 4 News, that selling Rover to the Germans was no different from selling the Hilton hotel chain to the British shows how little he understands the manufacturing industry.

Not that you can blame BMW. Its business acumen has been brilliant: in one fell (and, Honda claims, foul) swoop it has neutered an increasing threat (Rover), temporarily thwarted the European plans of its biggest Japanese rival (Honda), and stolen a march on Mercedes by quickly gaining access to a cheap-labour, high-skill production base. This is especially important if you are interested in building small, inexpensive cars. What is Mercedes' next big project? A small car.

The purchase is no endorsement of Britain's economic strength: quite the contrary. True, we now have a good motor-industry infrastructure, largely thanks to the Japanese (whom our government has now slighted). But probably the biggest factor in BMW's interest is our cheap labour, available at half the German price. That, surely, is a sign of economic malaise rather than strength. Put crudely, we are cheap but skilled panel beaters, with the additional advantage (for employers) of charging low social overheads.

BMW may want our brawn, but there is little evidence that it wants our brains. Rover ceased engineering its own cars about 10 years ago: the last largely British- engineered model was the Montego. When asked earlier this week if he would continue with the Montego and its hatchback twin, the Maestro, Mr Pischetsrieder replied, with some surprise: 'Does Rover still make them?' He was assured it did. 'Then it won't be making them much longer.'

Every new Rover since the Montego - the cars that have helped to lead the company out of the mire - is a reworked Honda. Rover's engineering department tunes, repackages and tweaks Honda cars. On some models it fits its own (very good) four-cylinder engines. In styling terms, it also does a good job: Rover models invariably look better than the Honda equivalent. None the less, any suggestion that BMW is buying Rover for its engineering nous is absolute nonsense. (Land Rover, on the other hand, can give BMW useful four-wheel- drive information.)

Now that BMW holds the reins, there is likely to be even less British engineering input for Rovers. It is inconceivable that BMW (still comparatively small) could justify keeping two engineering centres. Within three or four years, I expect all BMW's engineering - excluding the specialists at Land Rover - to be concentrated in Munich.

The irony is that Rover's engineering department was starting to become more autonomous, under Honda's umbrella. Its latest project, the KV6 engine, was due to see the light in 1996. However, the Rover design department, one of Europe's finest, will almost certainly continue and might even expand.

What irks me about the BMW deal is that there was an alternative that would have left Rover independent. Only last week, Honda was urging British Aerospace to sell it 47.5 per cent of Rover, up from its current 20 per cent. It expected British Aerospace to float the other 52.5 per cent on the stock market. Given Rover's recent success, and the confidence generated by a much bigger Honda stake, the flotation probably would have been successful.

In the end, it was Honda's unwillingness to buy a majority stake in Rover, though, that opened the door for BMW and lost Britain its indigenous car industry. Honda did not want a majority stake. That simply is not the Japanese way. It wanted to preserve Rover's independence. Sadly, neither British Aerospace nor, perversely, the British government, felt the same way.

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