BMW to cut Rover prices

(story to be published in tomorrow’s issue, April 4)

BMW, the German carmaker, is cutting prices across its loss-making Rover Car range in a bid to reduce stocks ahead of the sale of Rover to Alchemy Partners, the private equity investment group. Prices of Rover’s 25, 45 and 75 models are being reduced by 10-12 per cent as part of a month-long campaign to win back customers following the controversial sales announcement last month. BMW’s launch of the marketing scheme coincided with a mass demonstration in Birmingham at the weekend to protest at the break up of Rover Group. Senior officials at the German carmaker – which claimed the government received clear signals about the sell-off – insisted the sales campaign did not amount to “distress marketing”. “This is not a fire sale but a competitive marketing initiative,” said one executive. The cashback offers will reduce the price of a Rover 75 1.8I Classic by L2000 ($3,200) to L16,280. A three-door Rover 25 1.4I will fall by L1000 to L8,395. The end of the month-long sales drive is expected to coincide with the completion of sales negotiations with Alchemy. BMW admitted that Rover sales had fallen sharply following its decision to withdraw from Rover Cars. Monthly new registration figures due to be released shortly by the Society of Motor Manufacturers and Traders are expected to show Rover sales fell almost 20 per cent in March. Publication of the figures comes as the government is preparing to publish its long-awaited recommendations on the future of new car retailing and distribution – based on the findings of a nine-month Competition Commission investigation. Industry executives said the March figures would show that new registrations rose about 6 per cent last month, reflecting demand among business users and fleet buyers for the new W number plate prefix. Nevertheless, several manufacturers including Rover saw sales fall sharply last month. Nissan, Mazda and Alfa Romeo, in particular, are thought to have been hit by sluggish sales among private retail customers. Dealers and manufacturers have blamed the decline on consumer expectations that publication of the Competition Commission report will lead to large price cuts. Reuters