The German car maker BMW will have to vet the deal between MG Rover and Shanghai Automotive Industry Corporation which will result in effective control of the UK car maker passing into Chinese hands, the Independent newspaper reported.
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The paper said BMW still owns the rights to the MG and Rover marques and would have to approve any arrangement under which SAIC takes a majority stake in a joint venture with MG Rover and begins production of MG and Rover cars in China.
In particular, the Independent said, BMW will need guarantees from the Chinese that they will not use the Rover brand to move into the off-roader/SUV market. This reportedly is due to conditions agreed in 2000 when BMW broke up the Rover group, selling the cars business to Phoenix Venture Holdings (PVH) and the Land Rover division to Ford. The American automaker was concerned that MG Rover might go back into the off-road sector of the market in direct competition with Land Rover, using the Rover brand.
The Independent said the agreement between MG Rover and SAIC, due to be signed next year, envisages investing up to £1.5 billion in four new models – a medium-sized car to replace the Rover 45, a small car replacement for the Rover 25, a new large car based on the Rover 75 platform and a new MG sports car.
MG Rover has an indefinite, royalty-free licence from BMW to manufacture under the two brand names, the paper said. A BMW spokeswoman told the Independent: “It is for us as owners of the trademark to ensure that future use of the marques does not go against the prerequisites put in place at the time of the sale of Rover and Land Rover in 2000. The prerequisites mainly relate to the concerns that Ford had.”
She reportedly added that no talks had yet taken place with either MG Rover or SAIC about future use of the marques.
