Ford has dashed Chinese hopes of owning the Rover brand by triggering an option to buy the famous trademark from BMW.
Shanghai Automotive Industry Corporation (SAIC) agreed to buy the brand name last month but the deal was derailed yesterday as Ford exercised its right to first refusal on the marque. Ford had inserted the clause into the deal that saw it acquire Land Rover from BMW six years ago. The US motor group said yesterday it wanted to buy the Rover brand to protect its range of off-road vehicles.
A spokeswoman for Ford's Premier Automotive Group (PAG), the unit that owns Land Rover, said the company had no immediate plans to revive the Rover brand. The original Land Rover deal also barred a buyer of the Rover brand from using it on 4x4 cars but Ford did not want to take any chances, she added. "We are not ruling out reviving the Rover brand but we are not going to use it in the near-future either," she said. "By using the Rover name on another vehicle there would be plenty of room for confusion."
The move follows speculation that Ford had planned to sell off all the premium brands within PAG, which include Jaguar and Volvo. One of the most famous members of the PAG stable, Aston Martin, was put up for sale by the struggling motor group last month as part of a wide-ranging restructuring. However, Ford said last week it had no plans to dispose of Jaguar.
"Jaguar is not for sale," said Mark Schulz, executive vice-president of Ford. The Ford spokeswoman added yesterday that the group had no intention of selling on the Rover name.
Concerns over Rover's future within Ford are dwarfed by the scale of the problems at the parent group. The Ford Motor Company could lose $9bn (£4.8bn) this year as part of its latest streamlining plan, which will involve the loss of a third of all salaried employees, or 14,000 jobs. Two more factories will shut by the end of 2008, on top of 14 closures that have already been announced.
Despite Ford's pledge that the Rover brand will not be making a short-term comeback, the cars are still expected to reappear in some form. SAIC already owns the rights to Rover models after buying them from the MG Rover group before it fell into administration last year.
However, Ford's exercising of pre-emption rights to the Rover name is not the first blow to SAIC's ambitions. Another Chinese company, Nanjing Automobile, beat its rival to the production equipment at MG Rover's plant at Longbridge in the West Midlands. Despite the brand and equipment setback, SAIC is making its own cars based on the Rover platform and is hoping to sell them in developed markets including Europe. Nanjing is making an initial £10m investment in the MG TF sports car in the first half of next year and aims to produce about 15,000 of the vehicles a year.
The components for the MG TF will be made in China before being shipped to Longbridge but other models will be manufactured entirely in China. The top-of-the-range MG ZT is expected to go on sale in the UK in 2008.
Nanjing and SAIC both have designs on their domestic markets and will be using assets from one of British industry's best known companies to make inroads into the burgeoning Chinese car market.
