INDIA: Tata may end deal with MG Rover over SAIC tie-up

By just-auto.com editorial team | 8 December 2004

Tata Motors said on Wednesday its deal to sell Indica cars to Britain's MG Rover stood, but that could change if Rover goes ahead with a proposed Chinese venture.

A local business daily on Wednesday quoted chairman Ratan Tata as saying there could be "no engagement at all" with MG Rover if the UK firm struck a proposed deal with China's Shanghai Automotive Industry Corporation (SAIC).

The newspaper attributed Tata's remarks to an interview with Britain's Sunday Times newspaper.

A Mumbai-based spokeswoman confirmed the chairman's comments, but said there was nothing further to add at this time.

In the Sunday Times interview, Tata said the company had received "little information" from MG Rover about the extent of the proposed deal.

"To be very frank we do not know what the extent is of their engagement with SAIC. They have been less than forthcoming themselves," Tata was quoted as saying.

"I would say that if their engagement is really a fully fledged engagement, then I have no doubt that we will move to a second or third level of involvement, which is tantamount to saying there is no engagement at all," he added.

MG Rover Group signed an agreement with Tata Motors, India's third-largest car maker, in December 2002, to buy 100,000 Indica hatchbacks over five years to sell in Europe.
In September this year, Tata Motors admitted demand for the Indica, called the CityRover in the UK, was less than expected, but played down media reports suggesting the partnership was in trouble due to differences over pricing and distribution.