Production boost hint for Rover

RUSSELL HOTTEN
Thursday, 28 July 1994

THE GERMAN car maker BMW said yesterday that its Rover Group subsidiary was operating at full capacity, providing a further hint that production at the British plant may be expanded. BMW, which yesterday reported first-half profits increased to DM290m ( pounds 120m) from DM255m, has already announced a pounds 70m expansion of Land Rover.

On Monday, Rover said its sales in the first half rose 16 per cent to 234,600, highest for four years. BMW has suggested it would raise production capacity if its worldwide sales continued to increase.

'Plants (at Rover) are operating at the limits of capacity, and in some instances special shifts were worked,' BMW said. 'Acquisition of Rover leads us to anticipate an expansion in the joint business volume and profit base in the medium term.'

The combined group will produce around a million cars this year, putting it in seventh place in the European league. BMW paid the second instalment of pounds 240m for Rover at the end of June. BMW produced 285,163 cars in the first six months, against 277,076. About 200,000 of its successful 3-series were sold, a 9 per cent rise. Sales of the mid-range 5- series were steady at 77,000.

The company was confident that the recovery of most markets would continue, but warned about economic conditions in Germany. 'Any continued rise in the value of the mark against other currencies could undermine the beginning economic recovery,' it said. It expects US sales to continue rising in 1994, but in Japan they may not improve until next year. It says the UK will continue as Europe's strongest growth market.