MG Rover Groupwas a Britishcarmakerthat existed between 2000 and 2005. It was the last domestically owned mass-production car manufacturer in theBritish motor industry.The company was formed whenBMWsold the car-making and engine manufacturing assets of the originalRover GrouptoPhoenix Venture Holdingsin 2000.
Industry | Automobiles |
---|---|
Predecessor | Rover Group |
Founded | 2000 |
Defunct | April 2005 |
Fate | Administration, with £1.4 billion in debt, later liquidated |
Successor | MG Motor |
Headquarters | Longbridge,Birmingham,United Kingdom |
Number of locations | |
Key people |
|
Brands | |
Parent | Phoenix Venture Holdings |
Subsidiaries |
|
Website | web |
MG Rover went into administration in 2005 and its key assets were purchased byNanjing Automobile Group,[1]with Nanjing restartingMGsports car and sports saloon production in 2007. During that year Nanjing merged withSAIC Motor(the largest vehicle manufacturer in China). During 2009 the UK subsidiary was renamedMG Motor UK.TheMG TFwas manufactured at the former MG Rover Longbridge plant and sold within the UK from 2008 to 2010. In 2011 the first all new MG for 16 years (theMG 6) was launched in the UK (assembled at the Longbridge factory). During 2013 a supermini was added to the line up (theMG 3), this went on to help MG Motor become the fastest growing car manufacturer within the UK in 2014.
TheRover brand,which had been retained by BMW and licensed to MG Rover, was sold toFord,which had boughtLand Roverfrom BMW in 2000. The rights to the dormant Rover brand were sold by Ford, along with theJaguar CarsandLand Roverbusinesses, toTata Motorsin 2008.
MG Rover Group was formally dissolved on 28 May 2023,[2]more than 18 years after it was originally put into administration in April 2005.[3]
History
editMG Rover was formed from the parts of the formerRover Groupvolume car production business which BMW sold off in 2000[4][5]due to constant losses and a declining market share.[6][7]BMW had acquired the Rover Group fromBritish Aerospacein 1994 and had since sold theLand Roverbusiness toFord,[8][9]and split off theMINIbusiness as a new BMW subsidiary based inCowley.[10]MG Rover took control of the volume component of the formerRover Group(itself the remaining rump ofBritish Leyland,which in turn had its roots in the even olderBritish Motor Corporation,formerlyAustinandMorris), which by now consisted solely of theLongbridge plantinBirmingham.Of the Rover Group's other two major plants;Solihullhad already been divested as part of the sale of Land Rover to Ford, whilst theCowleyandSwindonplants were retained by BMW for the production of the new MINI family of vehicles. As part of these changes, all remaining Rover volume production at Cowley (essentially now just theRover 75as the Rover 600/800 ranges had already been discontinued by this point), was moved to Longbridge, whilst MG Rover would be allowed to continue manufacturing the originalMiniat Longbridge until the new MINI was launched by BMW a year later.
Phoenix Consortium ownership
editWhen BMW sold off its interests, MG Rover was bought for a nominal £10 in May 2000 by a specially assembled group of businessmen known as the Phoenix Consortium.[5]The consortium was headed by ex-Rover Chief ExecutiveJohn Towers.
When Phoenix took over, their first loss for the last eight months of 2000 were reported to be around £400m. By 2004, the company had reduced the losses to around £80m but never made a profit.
MG Rover's best year for car sales was their first full year of business, in 2001 – when they sold over 170,000 cars. In 2004 their sales had declined to around 120,000.
The company ceased trading on 8 April 2005, with debts of over £1.4 billion, after a proposed alliance withSAICcollapsed.
In relation to this, accounting firmDeloittewas fined £14 million (US$22 million) in September 2013 for failing to manage conflicts of interest. Deloitte had acted as corporate finance advisers to firms involved with MG Rover and the Phoenix Consortium, including tax advice while Deloitte audited MG Rover. An independent tribunal refused to grant the right to appeal a finding that Deloitte failed to consider public interest, as of November 2013.[11]
Aborted deal with SAIC of China
editIn June 2004, it was learned thatShanghai Automotive Industry Corporationhad signed a joint venture partnership to develop new models and technologies with MG Rover. This led to much speculation among the British media suggesting the Chinese company was poised to launch a takeover. Later that year, in November, news broke of an agreement between the two companies to create a joint venture company to produce up to a million cars a year, with the production shared between MG Rover's Longbridge site and locations in China. SAIC were to have a 70% stake in this company in return for a £1 billion investment, with MG Rover owning the remaining 30%. However, this agreement had to be ratified by the Chinese government, specifically itsNational Development and Reform Commission(NDRC). The Commission held the opinion that if BMW could not make a success of Rover, then it would be hard for SAIC to do so.
On 8 December 2004,Tataof India, which had cooperated over the export of theTata Indicaas theCityRover,threatened to cease its agreement with MG Rover if the SAIC tie-up went ahead, according to the Indian press. Tata claimed the report was inaccurate two days later.
In January 2005, it was revealed that British Prime MinisterTony Blairhad intervened to support the alliance between MG Rover and SAIC. MG Rover could not give a date on which the agreement would be finalized.
In April 2005, it was reported that the partnership deal with SAIC was in trouble because the British Government had decided to withdraw its offer of a £120 million loan to keep the deal going. On 7 April 2005 the company announced that it was suspending production because of component shortages. Later in the day, it was announced byPatricia Hewitt,theSecretary of State for Trade and Industry,that the company was being placed in receivership. Her statement was based on a conversation with MG Rover chairman,John Towers.It was later denied by MG Rover Group, although the company admitted that it had engagedPricewaterhouseCoopers,theaccountancyfirm, to advise on its current financial situation. In the event, MG Rover placed itself inadministrationon 8 April 2005, a different status fromreceivershipunder British law.
On 8 April 2005, British Prime Minister Tony Blair andGordon Brown,theChancellor of the Exchequer,and Richard Burden, Labour M.P. for Birmingham Northfield visited Tony Woodley at the offices of theTransport and General Workers' UnioninBirminghamand stated that there might be some hope for the future of the company, although not the original deal agreed with SAIC. In the media, any news about MG Rover was overshadowed by thePope's funeraland the problems of the register officemarriage of the Prince of Wales and his bride.
On 10 April 2005, MG Rover announced that they had received a £6.5M loan from the British Government.[12]This would cover workers' wages for one week while buy-out proposals were made to SAIC. The same week, SAIC denied it had ever made an offer to buy MG Rover and threatened to sue anyone who attempted to make the 25 and 75 models.[citation needed]SAIC purchased the technical rights to manufacture Rover's 25 and 75 models, and for thePowertrain Ltdbusiness, for £67M. It did not acquire the Rover name, which was still owned by BMW at the time (See 'Brands' below).
Financial ruin
editOn 15 April 2005, it was announced that SAIC had once again rejected pleas to buy out the company. With no other rescue deal in the pipeline, the administrators were not in a position to seek further funding from the government and announced that redundancy notices to Longbridge staff (who numbered more than 6,000) would be issued.
As well as the job losses at Longbridge, the months which followed the collapse of MG Rover resulted in many job losses in the supply chain, as well as jobs in MG Rover dealerships, as these businesses either went bankrupt, were faced with having to make job cuts, or in the case of some dealerships switched to different brands.
By the end of April 2005, SirRichard Bransonhad reportedly expressed an interest in buying the remaining assets of the company for the purpose of reviving the marque in order to enter the hybrid automobile market, and several other parties were also rumoured as wishing to buy the remnants. These included two Russian businessmen, although one of them denied any interest in buying the company's assets. The Iranian state-owned car manufacturer,SAIPAwho had worked with MG Rover installing the K series engine in a car for the Iranian market that was based on the oldMazda 121andKia Pride,were also rumoured to be potential buyers.
SAIC had claimed that it had already acquiredintellectual propertyrights in some Rover products for £67 million in the autumn of 2004, including theRover 25,theRover 75and the Rover PowertrainK-seriesengine, but the Administrators advised that there was still interest in saving some other parts of the company, including MG, and 13 May 2005 was set as the deadline for bids from potential investors.
On 20 May 2005, the Administrators announced that, after considering numerous proposals, they had entered talks with two unnamed "overseas companies" with a view to restarting one or more of the Longbridge production lines. Nevertheless, the following week they informedcreditorsthat they by then expected the company to proceed instead to a creditors' voluntaryliquidation,setting the date for a preliminary Creditors' Meeting to be held inBirminghamon 10 June 2005. At that meeting, creditors learned that so little of value was left in the company that there would probably be negligible or even no repayment of its outstanding debt and that, although three bidders were then still negotiating to acquire the company intact as a going concern, the Administrators had instructed theiragentsto prepare for the piecemeal sale of the very few remainingassetsin the event that satisfactory negotiations for the sale of the entire business were not concluded.
On 14 July 2005, it was reported that Magma Holdings, a financial group including formerFord Motor CompanyandGeneral Motorsexecutives, working in conjunction with SAIC, would be making an offer for the assets of both MG Rover and engine maker Rover Powertrain which, if successful, would see at least some production being restarted at Longbridge, and that talks with the other two interested parties – China'sNanjing Automobile Groupand Project Kimber (aconsortiumof Birmingham businessmen led byDavid James) – were still in progress.
More than 6,000 workers at MG Rover lost their jobs when the company went into liquidation.[13]As many as 25,000 jobs were reported to have been lost in related supply industries, meaning that the total number of job losses brought on by MG Rover's collapse was somewhere in the region of 30,000.[14]
Nanjing
editOn 18 July, Magma Holdings and SAIC formalized their bid with a reported offer of £60M, with a number of additional conditions. However, that offer was not well received, and on 22 July, the Administrators announced that the principal remaining assets of the group had been sold to the Nanjing Automobile Group for around £53M, with a deposit of around $5M. Nanjing Automobile Group indicating that their preliminary plans involved relocating the Powertrain engine plant to China and splitting car production into Rover lines in China and MG lines in theWest Midlands(though not necessarily at Longbridge), where a UKR&Dand technical facility would also be developed. But on 27 August,The Daily Telegraphreported that the balance of around £47M, due on 22 August had not been paid. Citing confidentiality, the Administrators declined to comment.
Because theRover 45range produced at Longbridge had still had significant Honda content, originating from the companies' legacy partnership with Rover and British Leyland, Honda executives moved quickly to terminate the licensing agreement and removed tooling and assembly equipment for the car from Longbridge.
Nanjing Automobile started shipping equipment from Longbridge to China on 15 September and, according to a report inThe Timeson Saturday, 17 September, were close to a deal with SAIC under which they would manufacture the Rover 25 and Powertrain engines while SAIC would produce a stretched Rover 75. Nanjing Automobile Group was reported to be in exclusive negotiations with GB Sports Cars, a venture by former Rover managers, to re-establish MG production at Longbridge.
In late October, key ex-workers received letters from Nanjing Automobile Corp offering 10 months' work dismantling plant at Longbridge for reassembly in China while talks with GB Sports Cars continued. However, after announcing that the UK government had not offered any substantial assistance in either grants or loans, Nanjing Automobile was also reported to have begun negotiations with at least two other potential partners, including "a wealthy San Francisco family", and, in early November, Nanjing committed to making every effort "to resume production [at Longbridge] at the beginning of 2007".
In August 2008, more than three years after the facility had closed due to MG Rover's bankruptcy, assembly at Longbridge of a lightly revisedMG TFroadsterfor the European market, from Chinese-builtsemi-knocked-down(SKD) kits, restarted.[15]
SAIC Motor merged with Nanjing Automobile in 2007, whilst nearly three-quarters of the massive Longbridge factory had been demolished and its land sold off - the old South Works is the only part of the plant which has survived. By 2011 MG Motor UK as it is now known started production of the first all new MG in 16 years, the MG6. In 2013 a new super-mini was added to the line up, the MG3. This was launched in summer 2013 and during 2014 helped in making MG Motor the fastest growing vehicle manufacturer within the UK. During the spring of 2015 a new MG6 was launched and plans for a new SUV were unveiled for the following year.
Official reports
editThe UK Government commissioned reports into the collapse of the company. TheNational Audit Officereported in March 2006 on the financial support provided to the company. It commended the DTI's contingency planning in 2004, but questioned whether the loan made in April 2005 achieved value for money.[16]
The DTI commissioned accountantsBDO Stoy Haywardto report on the collapse of the company; this took four years to complete at a cost of £14.8 million.[17]The firm issued its report to business ministerPeter Mandelsonin July 2009, and it was published on 11 September 2009. The report revealed that five executives took £42m in pay and pensions from the troubled firm as it collapsed. This was possible as Techtronic, the company that held the 427 million pound loan from BMW and was owned by the Phoenix Four, charged MG Rover interest and therefore made a profit.[18][19]The report focused its criticism on thePhoenix Fourand chief executive Kevin Howe who oversaw its collapse.
Other findings included evidence of a personal relationship between Nick Stephenson and a consultant who he paid more than £1.6m in the 15-month period up to April 2005.[20]Meanwhile, "Evidence Eliminator" software installed by Mr Beale[who?]deleted documents which were likely to have been relevant to the investigation. The investigators further accused Mr Beale of giving "untruthful" evidence during interviews.[21][22]
Conservative business spokesman Kenneth Clarke said it was right the report criticised the Phoenix Four, whose behaviour was "disgraceful". Lord Mandelson said the Phoenix group had not shown an "ounce of humility" about the firm's demise and they owed an apology to the firm's employees and creditors.
TheSerious Fraud Officedeclined to mount an investigation into the matter,[23]but Mandelson instructed lawyers to prepare a case to disqualify the key figures atPhoenixfrom future company directorships.[24]In May 2011, the Phoenix Four were disqualified as acting as company directors for varying lengths of time, totalling 19 years.[25]
Sales
editThis sectionneeds additional citations forverification.(October 2007) |
The MG Rover range initially consisted of five cars: theMini,Rover 25,Rover 45,Rover 75andMG Falong with car-derived van derivatives of the 25. The Mini was only built under temporary licence during the first five months of MG Rover's existence, and since the 1980s had only been built in limited numbers. After production finished, previous owner BMW regained the rights to use the brand, and did so on an all-new car that was launched in 2001:MINI.
The Rover 25 and Rover 45 were recently facelifted versions of visibly ageing mid-1990s designs, but production figures had been slightly decreased due to a fall in demand, even though the Rover 25 had been Britain's best-selling car of the month in April 2000. Both cars still had significant Honda content within their design (for example, the 25 still used underpinnings based on the 1989Honda Concertoand the related Series IIRover 200,whilst the 45 was essentially a rebadgedHonda Civic/Domanioutfitted with a K-series engine) - a legacy from Rover's one time partnership with Honda, which necessitated paying the Japanese company significant royalties on every car sold which further dented the profitability of those models.
The acclaimed Rover 75 was little over a year old, and after a slow start sales were rising. An estate version was launched following the shift of production fromCowleytoLongbridge.The replacement for the MG F, theMG TFsports car was, inevitably, a relatively low-volume product, but it had consistently been the most popular car in its sector since its 1995 launch.
The Rover 25 and Rover 45 endured disappointing sales throughout MG Rover's existence, though theirMG ZRandMG ZSsports variants proved popular from their launch in 2001. The Rover 75 and itsMG ZTsports variant enjoyed more popularity.
The range further expanded in 2003 with the launch of the smallest model, the Indian-builtCityRover,built as part of a venture withTata,and a flagship model, theMG XPower SV,based on theQvale Mangusta.Both cars, however, failed to achieve the sales figures that MG Rover had hoped for.
Year | European sales | European market share |
2000 | 197,940 | 1.32% |
2001 | 159,685 | 1.06% |
2002 | 142,355 | 0.97% |
2003 | 135,227 | 0.94% |
2004 | 114,069 | 0.71% |
2005 | 46,583 | 0.29% |
2006 | 7,783 | 0.05% |
Vehicles
editMG Rover made the following vehicles during its lifetime:
Model | Picture | Years | Class |
---|---|---|---|
MG F | 1995–2001 | Roadster | |
MG TF | 2002–2005 | Roadster | |
MG ZR | 2001–2005 | Hot hatch | |
MG ZS | 2001–2005 | FF-layoutMid-size/Medium Family | |
MG ZT | 2001–2005 | 5-doorExecutive car/Large Family | |
MG XPower SV | 2003–2005 | Sports car | |
Rover 25 | 1999–2005 | Small FamilyHatchback | |
Rover 45 | 1999–2005 | Mid-size/Medium Family | |
Rover 75 | 1999–2005 | 5-doorExecutive car/Large Family | |
Rover CityRover | 2003–2005 | 5-door FamilySupermini | |
Rover Streetwise | 2003–2005 | 3/5-doorCrossover |
Timeline
edit- May 2000: MG Rover was formed as the part of the former Rover Group's mass-market car business which BMW sold to thePhoenix Consortiumfor a nominal £10. BMW retains theMiniarm of the company and theLand Roverarm of the company is sold toFordfor £1.85 billion. Production of theRover 75is switched fromCowleytoLongbridgefollowing BMW's decision to retain the Cowley plant.
- 2001: MG Rover buy the factory and the rights to the platform of theMangustacar fromQvaleof Italy for an estimated £10 million.[26]
- 2001: The Rover 75 Tourer is launched.
- 2001: TheMG ZR,MG ZSandMG ZT(based on theRover 25,Rover 45andRover 75respectively) are launched as sporting alternatives to the standard Rover models.
- 2002: A revised version of the MG F is launched as theMG TF.
- 2002: MG Rover agrees to collaborate withTataof India, with the intention of importing theTata Indicato Europe from next year under the Rover brand.
- 2002: MG Rover also goes into talks withBrilliance China Autowith plans to build MG Rovers in a plant in China
- 2003: MG Rover launches the newMG XPower SVand SV-R sportscars, prices start at around £65,000. The car is based on the Qvale Mangusta and uses theFord 4.6-litre V8 enginewith two different power outputs.
- 2003: MG Rover launches the newCityRover- a small 5-door hatchback city car, based on theTata Indica,the first product of the collaboration withTata Motors.The car is built in India.
- 2003: MG Rover launches V8 variants of the Rover 75 and the MG ZT.
- 2003: MG Rover launch a restyled version of the Rover 25, theRover Streetwise.Referred to as an "urban on-roader", it hasSUV-like styling.
- 2003/04: MG Rover sell the Longbridge factory toSt. Modwen Propertieson a lease-back basis to raise funds.
- 2004: MG Rover launches facelifted versions of the Rover 25/45/75 and MG ZR/ZS/ZT with revised front and rear ends, with the intention of replacing these models with all-new replacements from 2006. Rover 25/45/Streetwise and MG ZR/ZS also get revised fascias.
- 2004: MG Rover enters in talks withShanghai Automotive Industry Corporation(SAIC) about a possible collaboration, following the collapse of a proposed venture withMalaysiancarmakerProton.
- 2004: MG Rover sell design rights to the Rover 25 and 75 to SAIC to raise money to help keep the business afloat in the face of falling sales.
- 2005: Negotiations on possible joint venture with SAIC stall, and MG Rover collapses. Price Waterhouse Coopers called in asadministrators.MG Rover car production ends and the Longbridge plant closes with the loss of more than 6,000 jobs.
- 2005:Nanjing Automobile Groupacquires the entire assets of MG Rover.
- 2005/06: Nanjing Automobile Corporation announces plans to build cars at Longbridge after signing a deal to lease the site for 33 years.
- 2006: SAIC sets up a new marque calledRoeweafter it failed to buy theRovermarque, and later launches a model based on an extendedRover 75platform, called theRoewe 750.
- 2006: Ford buys the rights to the Rover marque, meaning that only the MG marque can be used on the new range of Nanjing-built cars.
- 2007: Nanjing Automobile Corporation restarts MG TF production in China.
- 2007: SAIC and Nanjing Automobile Corporation announce a tie-up and on the 26 December NAC becomes a part of SAIC.
- 2008: Production of the limited edition MG TF LE500 commences at the Longbridge plant.
- 2009: Production of the standard MG TF 135 commences at Longbridge.
- 2010: Final assembly of the MG6 from Chinese kits starts at Longbridge
- 2010: MG TF production ends due to falling demand
- 2011: MG 6 Fastback production commences[27]
- 2016: MG production at Longbridge ends[28]
Sponsorship
editMG Rover sponsoredAston Villa Football Clubfrom 2002 to 2004, with Villa's home kit advertising Rovers and the away kit advertising MGs. Also, the company had sponsored the popularITVmurder drama seriesMidsomer Murders,in which a range of MG Rover cars were presented.
Brands
editAll of the following brands were controlled by MG Rover, and were formerly the property of British Leyland.
- 1895Wolseley
- 1905Austin
- 1912Morris
- 1913Vanden Plasas a coachbuilder and as a car brand (outside the US & Canada)
- 1923MGwas created byCecil Kimberbased onMorriscomponents
- 1930American Austina brand name created byAustinfor US market
- 1947Princesswas created byVanden Plasas a luxury car name
- 1987Sterlingcreated as a separate brand in the US by the Rover Group
TheRoverbrand was used under licence from BMW, and was sold to Ford following the collapse of MG Rover; it was subsequently bought in 2008 by TATA.[29]
TheMG XPowerbrand was created by MG Rover for theirmotorsportsubsidiary, MG Sport and Racing Ltd. in 2001.[30][better source needed]It was subsequently used for theMG XPower SVsportscar,a higher powered version of the Qvale Mangusta, in 2005. After the demise of MG Rover, assets of MG Sport and Racing relating to the XPower SV were acquired fromPWC,the Administrators, by the newly formedMG Sports and Racing EuropeLtd. However this company's use of the "MG" trademark resulted in a legal dispute withNanjing Automobile (Group) Corporation,which had also acquired assets of the defunct MG Rover Group.[31]This case was won by Nanjing in February 2010.[32]
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- ^"A new life for the Mini".BBC Online.BBC. 22 May 2000.Archivedfrom the original on 17 January 2009.Retrieved30 April2007.
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- ^"Community still mourns MG passing".BBC News.22 February 2006.Archivedfrom the original on 3 January 2008.Retrieved12 April2011.
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- ^Production resumes at LongbridgeArchived14 October 2023 at theWayback Machine-BBC News.
- ^"The Closure of MG Rover".nao.org.uk.National Audit Office. 10 March 2006.Archivedfrom the original on 29 April 2023.Retrieved11 August2009.
- ^Jetuah, David (11 August 2009)."SFO backs off from MG Rover probe".Accountancy Age.Archived fromthe originalon 13 August 2009.Retrieved11 August2009.
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- ^Peston, Robert(11 September 2009)."How did Phoenix Four do it?".bbc.co.uk.Archivedfrom the original on 14 May 2021.Retrieved14 May2021.
- ^Jagger, Suzy; Spence, Alex (12 September 2009)."Lies and cover-up at MG Rover exposed by report".The Times.London. Archived fromthe originalon 9 October 2009.
- ^"Volume 1 - Report on the affairs of Phoenix and Rover"(PDF).Department for Business, Innovation and Skills.Archived fromthe original(PDF)on 17 August 2011.Retrieved15 September2011.
- ^"Volume 2 - Report on the affairs of Phoenix and Rover"(PDF).Department for Business, Innovation and Skills.Archived fromthe original(PDF)on 16 August 2011.Retrieved15 September2011.
- ^"No probe into MG Rover collapse".BBC News.11 August 2009.Archivedfrom the original on 9 December 2023.Retrieved11 August2009.
- ^Bowers, Simon; Wearden, Graeme (11 August 2009)."Former MG Rover Boss es face boardroom ban".The Guardian.Archivedfrom the original on 24 May 2024.Retrieved11 August2009.
- ^Goodley, Simon (8 May 2011)."MG Rover directors banned from running companies after collapse".The Guardian.Archivedfrom the original on 24 May 2024.Retrieved27 April2024.
- ^Return of the MG / New ownership plans to bring a beloved roadster back to the U.S. market.San Francisco Chronicle, 7 July 2001. Retrieved 4 February 2011
- ^"New MG rolls off production line at Longbridge".SMMT.13 April 2011.Archivedfrom the original on 20 April 2021.Retrieved16 May2020.
- ^"MG to end UK car production at Longbridge with switch to China".BBC News.23 September 2016.Archivedfrom the original on 21 February 2024.Retrieved16 May2020.
- ^"Rover brand name passes to Ford".BBC. 18 September 2006.Archivedfrom the original on 18 January 2007.Retrieved19 September2006.
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- ^ Murphy, Megan (5 July 2008)."Battle over MG badge shifts up a gear".Financial Times.BBC.Archivedfrom the original on 10 December 2022.Retrieved4 January2010.
- ^"Car maker wins MG trademark battle".BBC Online.BBC. 19 February 2010.Archivedfrom the original on 24 May 2024.Retrieved22 February2010.
External links
edit- MG Rover Group(Archive)
- Austin Memories