Reitzle called in to give Rover new direction

Car industry: BMW's newly-appointed hard man expected to make waves during restructuring

RUSSELL HOTTEN

Stung by British hostility towards its takeover of Rover, Germany's BMW had tried to run the UK volume car maker at arm's length for 18 months.

This week BMW decided that this was a mistake and installed a new Rover chairman, Dr Wolfgang Reitzle, a hands-on manager and reputedly a hard man who no one doubts will make waves.

From being one of Europe's best performers last year, Rover is now one of the worst. But Rover's poor sales are symptomatic of a deeper malaise, one that has been causing serious concern at BMW since it paid British Aerospace pounds 529m for the company.

Disputes with car dealers, lacklustre models, and confusion about exactly where Rover wants to position itself in a crowded marketplace, are at the heart of the problem.

Figures out earlier this week showed Rover took only 10.22 per cent of the key month of August, down from 10.91 per cent last year. Its share of the market for the first eight months of this year is 11.03 per cent, compared with 12.22 per cent for the same period in 1994.

The underlying problems in the volume car business are made all the more stark because the figures include growing sales at Land Rover, the only real bright spot in the group.

John Towers, Rover's chief executive, had said the decline in UK sales was because the company wanted to reduce its dependence on the home market and expand in mainland Europe. Yet total European sales this year have also fallen, by 13 per cent to 190,000 models.

Rover says the sales decline is due to the ending of Maestro and Montego production. But in fact most of the range is suffering, and in the last week or two Rover's market share is believed to have slumped into single figures.

BMW's strategy is to move Rover away from the volume car business into the higher-margin, up-market category dominated by the likes of BMW itself.

A new generation of models is planned but such changes are slow to come through and, in the meantime, they are causing problems with Rover dealers.

One dealer said: "Take the Rover 400. It is a smaller car being positioned in a higher bracket because Rover has raised the specifications. So we now have the Rover hatchback being positioned against the Ford Mondeo.

"In times like these dealers are finding it hard to shift the product. The Rover range lacks excitement when it is pitched against some of the competition."

Dealers' margins have been cut to the bone, and Rover has done nothing to relieve the pressure with the sort of marketing incentives and leasing plans on offer from its rivals. Fleet business has been turned away.

Another dealer said that Rover, once flexible about showrooms selling rival models or used cars on the same site, had hardened its attitude. "The quality of the manufacturer-dealer relationship is no longer there," he said.

This is borne out by attitude surveys conducted by the Retail Motor Industry Federation which show that dealers' faith in Rover has fallen fast.

Dr Reitzle, number two in the BMW group, is expected to take a tough management line, and that could cause friction between him and the likeable and highly-regarded John Towers.

Mr Towers is believed to have initially been against the BMW purchase, and was not happy about the way Rover's long-time partner, Honda, was dumped.

Rover has been successful in stripping out cost, and recently returned operating profits of pounds 83m, but that is largely due to Land Rover's success.

Dr Reitzle is expected to come down still further on costs, and there are strong rumours that Rover is about to cut its dealership network, which has already been reduced from 1,200 to 650 outlets, because of the fall in sales.

Road test: The judgement on Rover's cars

r ROVER 100 Brought out at the beginning of this year as a replacement for the popular Metro. K-series engine is good, but car now somewhat old- fashioned and suffers in comparison with more sprightly rivals such as Renault Clio and Peugeot 106. Metro made regular appearences in top 10 sellers lists but Rover 100 has made the top 10 only rarely.

r ROVER 200 Rover fans keenly await the new model out in the new year. Current model seventh in the top-selling list for the first eight months of 1995.

r ROVER 400 May have been priced too high and wrongly pitted against the Ford Mondeo when it was really more a Ford Escort or Vauxhall Astra- type car. New four-door saloon version being launched at Frankfurt motor show next week could revive the fortunes of this model.

r ROVER 600 Well thought-of. New version due in 1997 will show the first fruits of the BMW-Rover partnership.

r ROVER 800 A bit stale. Needs up-dating but no new version expected in the near future.

r LAND ROVER Sales of the Discovery and Range Rover were disappointing last month. The Discovery has developed a number of faults although Rover has scotched reports that warranty faults have cost up to pounds 1,500 to fix, saying the average warranty bill was pounds 150.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
tech
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
life
News
i100
Life and Style
tech
Voices
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Recruitment Genius: Administrator - IFA Based

£22000 - £24000 per annum: Recruitment Genius: This is an opportunity to join ...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions