killed Saab Automobile? - Business School - University of Edinburgh

to be too much, and the company was taken into public ownership in the mid 1970s. Volumes fell from
a peak of over a million units a year to around 400,000 units, where they stabilized for a number of
years. Even this reduced figure was about triple what Saab ever achieved, albeit spread across many
more models.
Rover enjoyed a successful collaboration with Honda from the late 1970s to the mid 1990s in which
Honda provided designs and production know-how. This revived the company’s fortunes and it was
privatized through its sale to British Aerospace in 1987. Ironically, at the time of the sale there many
commentators drew parallels with Saab Cars, then still part of an aerospace and defence conglomerate
itself, and spoke of the synergies between the aerospace and automotive operations. By the late 1980s
BLMC had been through several name changes and was using the Rover brand on its cars, part of an
attempt to position itself as a moderate volume, semi-premium producer.
In 1994, Rover was bought by BMW. Honda ended collaboration at that point, which in due course
revealed the true extent of Rover’s dependency on Honda’s know-how. BMW initially adopted a handsoff
management approach to Rover, but as things started to go downhill became more interventionist.
An executive model, the Rover 75, was launched in 1998 but despite being reasonably well received by
the motoring press failed to sell as expected. In 2000, BMW sold Land Rover to Ford, the Rover-braned
volume cars business to a consortium of business man (the Phoenix Consortium) for £10, but retained
the new Mini, which was just about to launch. The Mini has subsequently been a great sales success
for BMW.
In 2000, Rover Cars thus found itself with a partial and aging model line up, apart from the quite new,
but poorly-selling 75, no product development capability and precious little capital, in an industry beset
by over-capacity. This was not unlike the situation faced by Saab in 2010. Like Muller with Saab, from
the outset, Phoenix attempted to find a partner for Rover, but were unsuccessful in doing so. As
matters became more and more desperate, Rover bought in a cheap economy model from Tata of
India, which it rebadged as ‘City Rover’, sold much of its remaining intellectual property to the Chinese
auto company SAIC and even sold its own site to a property company and leased it back. When the
end finally came, Rover’s remaining assets were sold to another Chinese company, Nanjing
Automobile. This did not include the Rover name itself, which had been sold to Ford along with Land
Rover in 2000. Consequently Nanjing, who later merged with SAIC, was forced to create a Roversounding
name for its vehicles - Roewe.
Production of MG vehicles restarted in the UK in 2008 with very small volumes of the MG TF LE500
sports car. lxxxiii
SAAB AND ROVER COMPARED
How do the stories of Saab and Rover compare?
First, Saab and some elements of what became Rover, via BLMC, both had strong, niche brands that
struggled with issues of scale. For example Jaguar and the original Rover car company itself both
occupied the premium end of the market, had distinct identities and modest volumes before their
eventual assimilation into BLMC. True, their identities were not the same as that of Saab, but some of
the issues they faced were similar. However, Saab was spared the ordeal of amalgamation with a
multitude of other equally weak car companies, with very different brands and positions in the market,
something which did lasting, and in our view fatal, damage to the stronger parts of the BLMC/ Rover
Group.
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