MG Rover motors into small car market with model built in India

There was a time when the British car industry sold off its ageing and unwanted models to India to be manufactured under licence for the drivers of the sub continent. Now, for the first time, it is to begin importing cars from India and selling them in the UK.

MG Rover yesterday unveiled the CityRover, the new model which will spearhead its return to the small car sector of the market in competition with the likes of the Peugeot 106, Ford Ka, Citroen Saxa and Fiat Seicento.

The CityRover is built by the giant conglomerate Tata in Poona, north west India, and is based on its existing Indicar model. MG Rover plans to import about 30,000 of the cars a year for sale in the UK and mainland Europe. The UK firm has also agreed to distribute two other Tata-built models - a 4x4 offroader called the Safari and a pick-up truck called the Loadbeata.

It is a far cry from the 1960s when MG Rover, or the British Motor Corporation as it was then known, made money by licensing production to Indian companies. The most famous example, the Morris Oxford, is still built to this day in India where it goes by the name of the Hindustan Ambassador and is the workhorse of every cab company in Delhi.

"Let's face it, the world is changing," said an MG Rover spokesman. "How many manufacturers do you know that make small cars in Europe these days and actually make money out of it?"

MG Rover would not disclose the commercial terms of its deal with Tata. But it did confirm that the CityRover would go on sale at a starting price of £6,500 when it hits the forecourts this November.

MG Rover has not had a contender in the small car sector since production of the Rover100 ceased in 1997. Its predecessor was the Metro, the model that in some respects saved Austin Rover.

The company likens the car to the Tardis - small on the outside but surprisingly roomy inside - with its tall build and long wheelbase. A team of engineers from MG Rover's Longbridge plant has been out in Poona since the agreement with Tata was signed six months ago helping to customise the car so that it has a Rover look and ride qualities familiar to British motorists.

MG Rover's other overseas alliance with China Brilliance has effectively collapsed but a spokesman said it was still hopeful of pulling off an agreement with another Chinese partner. The company, which was bought from BMW for a symbolic £10 three years ago, plans to make about 160,000 cars this year at Longbridge and will next month report a further reduction in losses for 2002 from the £187m deficit recorded in 2001.