Heseltine shrugs off Honda row

MICHAEL Heseltine, President of the Board of Trade, yesterday rejected suggestions that Honda's break with Rover in the wake of its sale to BMW could jeopardise Japanese investment in Britain, writes Michael Harrison.

He also dismissed the idea that the Government should have retained a veto on British Aerospace selling the carmaker into foreign hands. 'BAe had liquidity problems and it wished to deal with that so it could concentrate on its core business,' he said.

'If the Government had sought a veto, it would have had to answer some difficult questions about where BAe was to find the money for the programme which it had in mind.'

Honda shrugged off the demise of its 15-year partnership with Rover, saying it would build an independent operation in Europe. Honda hopes European sales this year will rise to 180,000 - 16 per cent up on 1993. By 1995 it intends to have a network of 2,000 dealerships across Europe.

Honda's pre-tax profits fell by 31 per cent to Y12.54bn ( pounds 80m) in the last quarter of 1993, largely because of recession in Japan and Europe and the strong yen. Net income was Y6.76bn. Profits for the first nine months of 1993/4 fell by more than half.