Bmw group1 overwiew

Therefore, the next analysis of the BMW Group can not be presented without a short overview of one of the BMW segments, the Rover automobiles.

ROVER STORY

Rover Company entered BMW Group in 1994. This bargain was widely discussed in mass media and the big part of leading manager’s staff had to leave this company protesting against this acquisition. Extending the share of BMW Group in automobile market Rover Group’s entry of also significantly affected the financial position of company. The constant decrease of demand in UK market, inefficient cost and production policies in Rover’s enterprises were among the reasons of Rover failure. Constant growth of British pound against DM, later against Euro made the Rover production noncompetitive against others European car-manufactures.

FIGURE 1 Rover market share 1994-1999

Big investments made in order to cut cost and increase the productivity of Rover plants were useless. Starting from 1994, Rover market share in Great Britain has been dropped from 11.3% to 4.6% , nearly 3 times (See Figure1).

I n the course of 1999 Rover despite having its’ cost significantly cut continued to loss the sales volume and profitability. British pound continued to increase against Euro. Therefore automobile makers in the Euro currency area continued to have a substantial competitive advantage which can not be set off even by an additional increase in productivity with Rover.
The BMW Group had to set aside substantial provisions for the process of restructuring and other risks with Rover. In all, this extraordinary expenditure totaled to 3.150 million euro and produced net loss of 2.487 million euro (See profit and loss account).

In the course of the first half of the year 2000, the BMW Group completed its reorientation and on 9 May 2000 British Phoenix Consortium takes over responsibility for the development, production and sale of Rover Cars. Phoenix has taken over approximately 7000 associates of the former Rover Group, the Birmingham Plant and accordingly production of the Rover 25, 45, the MGF and Mini Classics.

On June 2000, Land Rover together with Freelander, Defender, Discovery and Range Rover models was sold to Ford Motor Company for a purchase price of euro 3 billion.
The BMW Group remains supplier for Phoenix and the Ford Motor Company with certain engines, parts, and components.