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Rover blames Byers for crisis

25 March 2000

The head of Rover has blamed the government-backed campaign against "rip-off Britain" for contributing to its sales crisis.

Professor Werner Samann said the loss-making Rover group, which is being sold off by parent company BMW, had also suffered because of an investigation into car prices by the Competition Commission. Professor Samann dismissed suggestions that BMW had misled ministers over the sell-off and criticised Trade and Industry Secretary Stephen Byers, blaming him for the British carmaker's poor sales.

The Rover group's chairman and chief executive said: "The poor response to the Rover brand was caused by Mr Byers' `rip-off Britain' campaign, the Department of Trade and Industry's initiative with the Competition Commission on car pricing and consumer pressure groups. "Everyone now expects prices to fall by another 10%."

The professor said Rover had "lost" £2,000 on the average car after cutting prices, equivalent to £400m on UK sales of 200,000 units. BMW, which took over Rover in 1994, believed customers had stayed away from showrooms in the hope that prices would fall after the Competition Commission publishes its report, he added.

The German automotive giant also claims that the rising strength of the pound against the deutschmark has cost BMW £800m in the last six years. Mr Samann added: "We are concerned the government and a number of newspapers called BMW dishonest and the trade unions called us dishonest.

"At the end of the day, we failed to make the business viable, but to be called dishonest and dishonourable gives us concern."

Huge backlash

His remarks came as a new survey showed BMW's decision to sell Rover had provoked a "huge" public backlash. Six out of 10 people said they were now less likely to buy a car from the German firm.

And one in three BMW owners were now less likely to buy another BMW. The Amalgamated Engineering and Electrical Union, which commissioned the survey, said the findings were the first evidence of a "major public backlash" against BMW and will increase pressure on the firm to invest money to help regenerate the West Midlands.

"BMW's reputation has been dented by the damage they have caused in the Midlands, and it will take some time to recover," said AEEU general secretary Sir Ken Jackson. He added: "This increases the pressure on BMW to pump extra resources into the region."

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