This latest rescue of Rover is welcome - but will not secure its future

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The Independent Online

"If BMW can't make Rover a success, why should anyone else be able to?" Even as we welcome the news that the Phoenix consortium has taken on Rover's Longbridge plant and saved many jobs in the process, that fundamental question remains unanswered. We wish Phoenix the very best of luck, but we fear that they will find themselves out of their depth attempting to make Rover compete with the likes of Toyota, Volkswagen or Ford, who make 20 or 30 times the number of cars.

The problem for Phoenix is simply stated: not enough people want to buy Rovers. For all the pleas about the strong pound - and it is true that it does not help - the fact remains that others have managed to cope with a high exchange rate and still compete effectively at home and abroad. The relative success of Jaguar, Land Rover and Peugeot's UK operation demonstrates that there is more to the story. Indeed, the long-term success of BMW and the other German car-makers was built over decades in which the pound was devalued many times against the German mark.

The truth is that Rover has been on the slide for years, irrespective of the exchange rate. It has become a brand in decline, the butt of jokes, severely tarnished by BMW's mismanagement of recent events, with the whole affair sadly symbolised by the sale of the once-proud marque for just £10.

Put bluntly, Rover cars lack desirability. Would your lover be impressed by one? Rover's "wood 'n'leather" lark has run out of road. Sticking superior trim on ordinary cars and charging premium prices for them has yielded diminishing returns.

Clearly there is a role for "retro". Look at any BMW, Mercedes, Jaguar or Alfa Romeo and you will instantly be reminded of those makes' traditions. Grilles, badges, heritage, styling cues - they do matter. But that, unfortunately, was pretty much all that Rover had. More important is the need to imbue the brand with other associations: quality, refinement, advanced engineering, elegance, safety, reliability. And the way to do that is not by "badge engineering" but by designing and and building quality products, something that may be beyond Rover nowadays.

With a good deal of luck, Longbridge could turn in a small profit, with all its debts written off. In the short run, Phoenix could take up some of the ideas of its rival, Alchemy, to develop the MG sports range using state-of-the-art materials and production methods with Lotus. It might even refashion Rover's image.

But, in the long run, it is hard to see how the operation could generate the £1bn it takes to develop a new model. Eventually Phoenix will have to look for a "partner" for Rover. In an industry with huge worldwide over-capacity, there seems no compelling reason why any manufacturer would choose to make cars at Longbridge, which - like Dagenham - lies near the bottom of the European productivity league table. No doubt there will, in a few years, be another appeal to Stephen Byers or his successor to fund or underwrite another rescue plan. It is fervently to be hoped that, by that time, the Government will have developed a clear - and market-based - policy of non-intervention in private industry.

As BMW found to its cost, making Longbridge competitive is simply uneconomic. Rover has received another reprieve, and we should be grateful for that, but its long-term future remains far from secure.

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