For a company basing its business plan on strategic automotive partnerships, MG Rover has had a tough time finding the right partners.
So far, only the partnership with Indian manufacturer Tata Motors has produced a result. MG Rover is importing up to 40,000 CityRover small cars made by Tata for a much-needed sales boost this year. An MG Rover affiliate, Phoenix Distribution Ltd., is the import agent for Tata-brand models in the UK.
Experts say MG Rover must forge alliances to bring in development resources and open new markets.
MG Rover can only survive by using multiple partners, "including powertrain partners," said Nigel Griffiths, analyst for Global Insight Automotive in London.
MG Rover faces "expensive areas of research and development in the powertrain area at the end of this decade when we get close to Euro 5 [emissions standards]," he said. "They will have to license technology from somewhere."
Nick Matthews, automotive fellow at Warwick Manufacturing Group, a research and training arm of Warwick University in England, says continuing losses "puts them off meaningful relationships" with other companies.
"The only thing they have is cash," he said. "They haven't got any technology or knowledge anybody wants. Most of their partnerships are pretty low-level."
Earlier, MG Rover was a subordinate partner in relationships first with Honda then BMW. Those companies had money and engineering capability the company could use now. Currently MG Rover has no partnership prospects outside of emerging markets such as China and India.
Last year, its partnership with Brilliance China Automotive collapsed.
MG Rover was depending upon British engineering firm TWR for major development work on the Rover 45 replacement program, but TWR went bankrupt in 2003. MG Rover product development boss Rob Oldaker said the 45 replacement is now delayed until the second half of 2005.
Reports surfaced in late January that MG Rover is negotiating with the government of Slovakia to build a factory there. MG Rover officials discount the reports.
MG Rover says it is continuing negotiations to take over the bankrupt Daewoo FSO plant in Poland, but discussions with creditors and the Polish government are stalled.
Oldaker said talks are ongoing with potential partners to participate in the Rover 45 replacement.
"There are potential Chinese partners," he said, but declined to name them. Oldaker won't rule out Tata either.
Chinese visitors are at Longbridge regularly. Oldaker says the company has had keen interest from "virtually every Chinese manufacturer." Two Chinese companies are mentioned prominently: Geely and Chery.
MG Rover's goal is to find a partner who won't overwhelm it. The automaker wants to control its product development plans and schedule.
Said Oldaker: "We have to be 100 percent sure the equality of the partners is correct."