DESPITE MG Rover being placed in the hands of the administrators and the recent laying off of 5,000 staff at Longbridge, the company’s headquarters in the UK, the management of MG Rover Portugal remains confident that the Portuguese arm of the troubled company can survive the storm. In fact, when The Resident contacted MG Rover Portugal, Martim Mello, who has been the company’s public relations manager for the past 32 years, confidently declared: “It’s business as usual here.” MG Rover Portugal is based in Porto Salvo, in the Lisbon borough of Oeiras, and employs 21 staff. Importing cars from the UK, the
Portuguese branch of the British car manufacturer supplies around 2,500 cars per year to 33 dealers throughout Portugal.
Dealers in Portugal “not at risk”
According to Mello, there are no exclusive MG Rover dealerships in Portugal; all the dealers in this country market other brands alongside MG and Rover and, therefore, their future is safeguarded. This is also good news for MG Rover clients in Portugal, who then are unlikely to find their dealer out of business and its premises boarded up. And this brings us on to the issue of warranties.
When asked about the validity of warranties of MG Rover cars recently bought in Portugal, Martim Mello told The Resident: “The UK has always reimbursed MG Rover Portugal for repairs carried out under warranties.”
The situation in the UK is that MG Rover recently announced it could no longer afford to reimburse dealers for warranty repairs, so they would have to shoulder the costs themselves or pass them on to the customer.
So what will happen in Portugal? The public relations manager was optimistic: “We will try to avoid the customer losing out. Any client with a car still under warranty that comes across a fault should contact the dealer, who will try to solve the problem. I am sure they will do their best to help the client.”
Will parts still be available?
But, with Rover in the UK ‘going to the dogs’, what is going to happen about parts? According to MG Rover Portugal, it is estimated that there are close to 60,000 Rover and MG car owners in Portugal. There does not appear to be cause for concern though. Parts for MG Rover cars are made by a company called X-Parts that is owned by Caterpillar Inc. Dealers have direct access to this company, a major organisation, that has no financial link to MG Rover. Therefore, car owners “should not worry”, says Mello.
The future for existing car owners seems reasonably bright, but what about the future of MG Rover Portugal and its 21 staff working at the Oeiras office? “To be told that MG Rover was going into administration was a big surprise to us,” Martim Mello said. “We were being informed that the deal with Chinese car maker, Shanghai Automotive Industry Corporation (SAIC), was going ahead.”
Despite the depressing news from England, the public relations manager was very upbeat, saying that the company “had survived difficult situations in the past and that there was no reason to be overly worried for the moment.” According to Mello, the mood at Portugal’s HQ is strong and no job losses are being forecast at present. “The future does remain unclear though as it depends on the outcome of the UK process, but MG Rover has not been declared bankrupt yet and can possibly survive.There would be troubled times initially, but it could go on to be successful again, even if it does re-emerge with a different structure and reduced brands.”
After 32 years with the firm, witnessing the selling of the company by BMW for just 10 pounds to Phoenix Venture Holdings in the year 2000 and other such dramas, Martim Mello is talking from considerable experience.
Rover is popular in Portugal
One thing is for sure, MG Rover cars have been very popular in Portugal. In fact, Portugal has been the second biggest market for the brand after the UK. A total of 2,500 cars are sold every year in Portugal, the most popular model recently being the Rover 45, a medium-sized family car that is priced at 18,300 euros.
“There has always been a very pro-British feeling here in Portugal. The cars are nice and the service is good, and, ever since the launch of the Mini all those years ago, Portugal has been a market leader,” he said.
In fact, Mello informed The Resident that, despite five years of decline in terms of product diversity, “MG Rover Portugal has experienced better results over this recent period than for the same time last year”. The resolute PR ended his comments saying: “MG Rover Portugal is a profitable business”.
No comment from UK
The Resident contacted Longbridge hoping they could shed some light on the future of MG Rover Portugal, but Stewart McKee, who is in charge of international PR, said: “I am not in any position to make a comment on that now.”
The stress of recent days was clearly evident in his voice and, when enquiring about the value of used MG Rover cars in light of the company’s collapse, he tersely replied: “That’s nothing to do with us, I cannot forecast residual values – that is between the buyer and the seller.”
Latest from Longbridge
At the time of going to press, the latest news from the Longbridge plant in the Midlands was that an MG Rover task force was set to meet to discuss help for the 5,000 workers who are being made redundant. The task force will speed up plans to distribute 150 million pounds of government aid, which is also to be used to help Rover’s suppliers.
Helplines have been set up for the workers who will shortly receive redundancy notices in the post. The task force includes politicians, union leaders and business officials. The support package includes more than 60 million pounds to help diversify industry in the Longbridge area and to support MG Rover’s supply chain.
In addition to this action, the details of Rover’s finances and those of its owner, Phoenix Venture Holdings, are now up for investigation by the Financial Reporting Council, the regulator for corporate reporting and governance. Caroline Cunha