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No one is buying into us, says MG Rover.

Byline: John Duckers Business Editor

MG Rover has no plans to allow anyone to buy into the company, a spokesman said yesterday.

He firmly ruled out any swap deal of an equity stake in exchange for a car platform.

His comments came as weekend speculation suggested MG Rover could have renewed contacts with Malaysian car maker Proton.

Nothing has come of the rumours in the past and MG Rover has always refused to confirm whether or not talks have taken place. That was the situation again yesterday with the company branding the report 'pure speculation'.

The spokesman said: 'We are constantly having talks with a number of component suppliers and manufacturers on technical collaboration and engineering matters.' However, responding to suggestions that any deal on platforms would see Proton take a stake in MG Rover with the possibility of owning it outright in the future, he stressed: 'There are no plans to allow somebody else to take an equity stake in the business.' And that, he said, took in the whole of the company's five-year business plan.

But MG Rover does admit it could collaborate on a platform with another manufacturer.

As part of its model renewal programme it aims to build a new medium-sized car by 2004 to replace the Rover 25 and 45.

It would sell about 160,000 units a year and MG Rover says it has set aside pounds 350 million from its own resources to build it.

To secure a platform for the car it has four options.

It could cut down the R75 platform; it could do that in association with a components supplier; it could agree technical collaboration with a components supplier to produce an entirely new platform, or it could do the same with a rival car company.

'We are looking at all four and none have yet been ruled out,' said the spokesman. Like MG Rover, Proton is not a main player in the car industry. And, pundits have speculated, while Proton might help MG Rover out on platforms, MG Rover, now it owns the former BMW power plant on the Longbridge site, could sell Proton engines.

As for talk that MG Rover might make a pounds 50 million bid for Lotus, industry sources think it highly unlikely. Predicting the route the company takes could be as difficult as predicting June's deal to buy Qvale Automotive Group in Modena, Italy.
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Publication:The Birmingham Post (England)
Date:Sep 3, 2001
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