Sales of MG Rover cars in the UK fell by a third last month as the company battled a string of negative reports about how it was being run, the Daily Telegraph said.
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The London-based national newspaper has recently published reports about the financial structure of MG Rover’s parent company Phoenix Group, including revelations that the directors have set up a multi-million pound pension fund for themselves.
According to the Telegraph, figures from the Society of Motor Manufacturers and Traders (SMMT) showed that 4,300 new MG Rover cars were registered in November, compared with 6,293 last November. The company’s share of the UK car market also slipped, down from 3.7% to 2.5% over the same period, the paper added, noting that the fall was less pronounced in the 11 months to the end of November when the number of MG Rover car registrations fell 1.2% to 89,867 vehicles.
Over the same period, MG Rover’s share of the UK market slipped marginally from 3.8% to 3.7%, the report added.
The Daily Telegraph said the gloomy November trading figures came after the company told car unions last month that the negative publicity was hitting sales.
The unions have now hired a financial expert to investigate revelations in the Telegraph that MG Rover’s directors, led by chairman John Towers, have made millions while the car maker posted heavy losses.
A spokesman for Phoenix Venture Holdings, which owns MG Rover, told the paper: “A variety of factors affected sales” and declined to comment further.
The Telegraph said that MG Rover noted there had been big monthly rises and falls in the past, notably in January and April when registrations fell by 29% and 17% while, in May, September and October, rises of 11%, 10% and 14% were recorded by the SMMT.
Industry experts told the newspaper it was unlikely that the stories, which began in late October, could damage car sales so quickly. Cardiff Business School director of automotive industry research at Cardiff Business School director of automotive industry research, Garel Rhys, reportedly said the problem was MG Rover could not compete on price with bigger volume car makers.
He told the Telegraph: “All the indications are that November was a very difficult month. To keep sales up, manufacturers engaged in massive incentives.” Citroen had offered cars for sale without Value Added Tax – a 17.5% saving – he added, according to the Daily Telegraph.
