Magazine article Marketing

Can Alchemy's Fresh Formula Revive Rover?

Magazine article Marketing

Can Alchemy's Fresh Formula Revive Rover?

Article excerpt

New owners may offer Rover the chance to overcome much of the car brand's troubled history. Harriet Marsh looks at future options

BMW's decision to cut its losses and sell Rover hardly comes as a surprise.

In 1998, the launch of the Rover 75, What Car's Car of the Year was overshadowed when the BMW chairman let slip that it was considering closing the Longbridge car factory. Not the sort of comment to inspire confidence. Of the 50,000 Rover 75s to have rolled off the production line since then, half remain unsold.

This is just one reason why its acquisition from BMW by private equity group Alchemy Partners, which is being advised by former Rover marketer Kevin Morley, has raised eyebrows.

Brands dispersed

Under the banner of the MG Car Company, Alchemy has taken on the Rover 75, the 45 and the 25, the old Mini and the MGF roadster. Meanwhile, Ford has snapped up the Land Rover brand.

The MG Car Company will have its work cutout. Rover is costing BMW [pounds]2m a day in losses. Its UK market share is down from 11% in 1994 to about 5% now.

Long term it looks like Rover is a dead brand; the marque will be phased out over a number of years. Yet, for many years Rover, which launched in 1904, held a reputation for innovation. In the 1930s, it had 70% of the UK car market. In the 50s, the P4 marked the first of a series of saloons that would dominate the British car market over the next two decades. But by the mid-70s, battles with the unions and poor work practices took their toll.

Although the quality of the cars is now on a par with competitors, the Rover image has never fully recovered.

BMW acquired the group from British Aerospace in 1994 for [pounds]800m. Its 45 and 25 brands are remodelled Rover 400s and 200s, and are seen as outdated. The Mini may be overshadowed by next year's launch of BMW's version.

So which brands will survive? We asked two experts for suggestions.

Alex Batchelor is managing director of Interbrand Newell & Sorrell. Previously, he managed the Toyota ad account at Saatchi & Saatchi.

Gerald Kreinczes is chief executive of Occam Insight. An account planner on Rover in the mid-80s, he helped Kevin Morley set up Kevin Morley Marketing in 1991 and worked on Rover at both KMM and Ammirati Puris Lintas until 1997.

                                VITAL SIGNS
                               1999          1998 % change
UK sales                    143,343       163,919     -26%
UK market share                5. … 
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