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Rover revs up for two-seater success with new MG

Rover Group returns to the sports car market today with the revival of its famous MG marque, in a move aimed at repeating the success of Japanese manufacturers of low-cost, two-seater models.

After four years' development and £30m of investment, the long-awaited MGF makes its public debut at the Geneva Motor Show.

Although on the drawing board long before Rover was bought by BMW last year, the project has the full backing of the German car maker, which wants to establish the loss-making UK company as a more exclusive brand.

Rover, whose recent sales success and cost cutting has won it plaudits from industry rivals, cannot afford failure in what is regarded as a high- risk venture.

BMW's strategy for Rover is to reduce its dependency on the UK market. BMW is particularly keen that the MG, one of the world's biggest selling sports cars until the factory closed in 1980, is a success in America. Another target is Japan, home of MG's rivals Mazda and Toyota. Output of the MGF is put at 20,000 to 40,000 vehicles, with more than 25 per cent intended for export in the first year. John Towers, Rover's chief executive, said: "There has been enormous anticipation of the arrival of the new MG, and we are confident that in every respect it will match the most optimistic expectations."

The MGF goes on sale in the UK this summer with a price tag of £16,000 to £18,500. But this makes it more expensive than the cheapest Mazda MX- 5, which retails at about £14,500.

The MGF is being produced as a joint venture with Mayflower, the quoted Midlands engineer whose Motor Panels subsidiary is producing the car bodies. The 130mph car is fitted with a 1.8-litre version of Rover's K-Series engine, which sits just ahead of the rear wheels. It will be built at the company's Longbridge Plant in Birmingham. It will be capable of doing 0-100mph in under eight seconds, and will be sold through 130 specialist dealers in the UK and abroad.

Also at the motor show, another revitalised car company is preparing to take a gamble. Rolls-Royce Motors, the Vickers subsidiary, unveils one of its most expensive models, a £215,000 convertible version of its Bentley Continental R.

Analysts are anticipating a surge in Vickers' profits if, as forecast, the model achieves sales of more than 100 this year. Last week Vickers announced that Rolls-Royce doubled 1994 profits to £21m.