Rover helps BMW to push sales up 45%

Good final quarter means GM annual profits almost double
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The Independent Online
BMW, the German car group, saw turnover soar in 1994 thanks to the contribution from Rover Group, the UK car company it bought for £800m last year.

Sales at BMW were up 45 per cent to DM42.1bn (£17.5bn) in 1994, but excluding Rover that increase in turnover was cut to DM31.95bn, a 10.1 per cent rise.

BMW said yesterday that Rover had launched the German company "into a new dimension". Many analysts believe BMW got Rover at a bargain price, striking a deal just as the restructuring by British Aerospace was beginning to bear fruit.

Rover's output rose 16 per cent to 478,000 vehicles, the highest figure since 1989, when UK manufacturers were enjoying booming demand.

Deliveries of Rover cars throughout the world rose 11 per cent to 475,500 vehicles last year.

Land Rover was again the star performer, with the Discovery model leading the increase in sales of Rover's four-wheel drive vehicles. But BMW said successful marketing of the 600 series had also helped the sales increase.

Increased demand for Rover cars came mainly in continental Europe, where sales rose 16 per cent to 160,400, compared with an increase of 3 per cent in Britain, to 256,200 vehicles.

The share of the European market held by Rover was unchanged at 3.2 per cent in 1994.

The entire BMW group had produced 942,400 vehicles last year, with deliveries totalling 931,880 vehicles, an increase of 7.4 per cent.

BMW's joint venture with Rolls-Royce to produce aero-engines was performing well, the company said, and had "strengthened its position" in the short-haul aircraft market.

There was also good news for the world's largest industrial enterprise, General Motors, America's leading car producer. Fourth-quarter profits published yesterday of $1.57bn (£987m), up from $1.18bn, meant that GM's annual profits almost doubled to $4.9bn.

General Motors' revenue totalled $42.5bn in the period from October to December, compared with $37.27bn in 1993.

Excluding a charge of $758m for an accounting change, the 1994 profit totalled $5.7bn.

The company said that all of its divisions and subsidiaries produced good results in the final quarter. The North American operations, which account for 60 per cent of GM's revenues, saw its first profits for five years.

Annual profits of $690m, against an $872m loss, came after a fourth-quarter profit of $492m.

GM's president, Jack Smith, said it was good news, but added: "We still have a lot of work we need to do in North America."

Meanwhile, in the UK car market, a new report has forecast a slowdown in imports in 1995 as the German and mainland European economies move out of recession and producers switch their marketing away from the UK.

The western European car market grow by 5 per cent in 1994, and is expected to grow faster this year.

The report, by Marketline International, said that in 1994 UK manufactured and imported cars accounted for 45 per cent and 55 per cent of the market respectively.

The report forecast that by the year 2000 the British market for multi-purpose vehicles - such as Land-Rover's Discovery and the Renault Espace - would be among the faster growth segments of the industry.