BMW chief hits back at Rover critics

Motor industry: Pischetsrieder shrugs off falling sales... as VW strikes landmark union deal

German car group BMW has hit back at suggestions that it is unhappy about the sales performance of its UK subsidiary, Rover Group.

Speaking at the Frankfurt Motor Show yesterday, BMW chairman Bernd Pischetsrieder said suggestions that it had lost patience with Rover were "absolute nonsense".

Rover's European sales have fallen 13 per cent this year, and last week's news that BMW had appointed Wolfgang Reitzle as chairman prompted speculation that big changes were afoot.

Mr Pischetsrieder said Rover's performance was fully in line with expectations and that the fall in sales was due to the introduction of new models and a change in strategy.

Rover wants to become more of a niche player, developing a series of models that will move the company out of the volume sector. However, this strategy is creating conflict with Rover dealers, who have complained they are not getting the sort of support given to sellers of Ford or Vauxhall cars.

Mr Reitzle, whose reputation as a troubleshooter and tough manager sparked last week's speculation, said Rover's integration was going well. But he added that BMW expects it will take around five years before synergies between the two enable Rover to reach a new level of competitiveness and profitability. Last year Rover made a pounds 202m loss, despite the success of Land-Rover.

Mr Reitzle said the takeover of Rover last year was a "tremendous opportunity to cut costs".

Also at the motor show yesterday, Lotus, the British-based sports car maker owned by the financially troubled Bugatti group, unveiled a new lightweight model. The Elise two-seater convertible will sell for around pounds 22,000 and compete with roadsters such as Rover's MGF and the Fiat Barchetta.

Lotus plans an initial production volume of 700 units per year, with first deliveries in mid-1996. The mid-engined Elise is designed around what Lotus calls a revolutionary light-weight epoxy-bonded aluminium structure. The low weight, only 675 kg, helps braking, handling and steering response, and cuts fuel consumption.

Meanwhile, Chrysler's chairman and chief executive, Robert Eaton, told reporters at the show that the company had several strategies for any further takeover bids by Kirk Kerkorian. But he would not elaborate.

Chrysler's board voted last week to double its stock repurchase programme to $2bn (pounds 1.3bn), a few days after Mr Kerkorian hired Jerome York, a former Chrysler chief financial officer who has been with IBM for two years.

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