MG Rover is seeking savings of £100m as it tries to get its drive towards profitability back on track in the face of a continuing slump in its share of the UK car market.
So far this year the company's Rover marque has seen its market share fall by almost a fifth while the MG marque is down 8%, according to figures released by the Society of Motor Manufacturers and Traders (SMMT) yesterday.
Fewer than 31,000 Rovers were registered in the year to the end of August, compared with 38,500 in the same period last year, while MG registrations fell from almost 23,000 to slightly more than 21,000.
Last month the two marques accounted for less than 2% of the British market, with Rover registrations falling below 1,000 and MG selling fewer than 800 cars.
An MG Rover spokeswoman said: "The figures are disappointing. August is a particularly tough month with the [registration] plate change coming up in September. For a company like MG Rover, which is not chasing loss-making business, it is even tougher."
The SMMT calculates that August represents about 3% of full-year sales, compared with 17% for September.
According to the Financial Times, MG Rover's cost-cutting programme is designed to kick-start its stalled recovery, with last year's financial performance showing only a modest improvement on 2002, when it lost £95m.
A special committee has been set up to look at ways of ensuring the company is in the black for at least some months by the end of next year.
Yesterday MG Rover's spokeswoman declined to discuss the cost-cutting plan but said: "I don't think it's a surprise that any business losing money would be looking at ways of reducing costs."
Asked if that could mean job losses, she said MG Rover would look for savings "across the whole of the business".
As part of its strategy MG Rover is in talks with China's most powerful domestic car company, Shanghai Automotive Industry Corporation (SAIC), over a "far-reaching strategic cooperation" as the firm seeks to extend its global reach.
MG Rover has not given details of the likely collaboration, though last month it dis missed suggestions that SAIC would take an equity stake in the British company. Yesterday the spokeswoman said the discussions were continuing.
August was a difficult month for the UK car industry with overall sales down by almost 5% to just under 85,000 units. However, the total for the year to date was up 1% at 1.65m.
Christopher Macgowan, the SMMT's chief executive, played down the August figures. "Growth that has sustained the market for the last four years has eased a little in recent months and it will be the September figures that tell us if a strong start to 2004 will bring a fourth consecutive record year."
Yesterday's figures proved a mixed blessing for Land Rover, where executives and unions at the Solihull works are due to table a revised strategic plan to its owner, Ford, tomorrow. Overall sales to date are up 5% on the same period last year but August showed a 24% fall.
Land Rover's managing director, Matthew Taylor, has been quoted as saying the Solihull plant could face a "slow and lingering death" if it cannot win backing for the plan.
theguardian.com/car
