MG Rover has re connected with an historic base of 58,000 customers, through their retail finance contracts, and taken steps to maximise the future residual values of Rover, MG and Mini vehicles leased under BMW ownership.

The acquisition of Rover Financial Services from BMW has been made through MGR Capital, a newly formed joint venture between HBOS and the Phoenix Partnership. It has bought the customer contract portfolio for a total consideration of £340 million. MGR Capital will manage the financing arrangements relating to the portfolio, and with MG Rover Group, the eventual disposal of vehicles at the end of their finance leases.

This represents a further consolidation of MG Rover’s activities.

Kevin Howe, Chief Executive of MG Rover said: "This is an important step for the business to take. It puts us in more control of the second hand value of MG and Rover cars, which is a significant benefit to our business and our customers. It also creates many new marketing opportunities for the future."

Rover Financial Services, under BMW ownership, had been the finance provider for Rover, Mini and Land Rover customers since 1998. Ford acquired the Land Rover assets in a separate transaction in October 2001.

Stuart Middleton, Senior Director, Product and Market Development, HBOS said: "We are very pleased to be working with MG Rover Group. Its extensive knowledge of MG and Rover motor cars and the automotive market place will benefit both MG Rover’s business and ours."

Notes:

Rover Financial Services (GB) Limited ("RFS") provided finance for customers buying MG, Rover and Mini vehicles between May 1998 and March 2001. Its portfolio of customer retail finance contracts includes 58,000 MG, Rover and Mini vehicles.

MGR Capital Limited ("MGR Capital"), a joint venture between HBOS and the Phoenix Partnership, acquired the customer retail finance contracts from RFS. The Phoenix Partnership consists of the directors of MG Rover. The joint venture benefits from HBOS’ financial services expertise and the Phoenix Partnership’s knowledge of the automotive market and the MG and Rover product portfolio.

MG Rover Group Limited, based in Longbridge, designs and manufactures motor cars under the MG and Rover brands. Its product portfolio includes the Rover 25, Rover 45, Rover 75 and the MGF Roadster. Earlier this year its product offering was expanded by the launch of the Rover 75 Tourer and the MG sports saloon range – the MGZR, MGZS, MGZT and the MGZT-T sports wagon.

STATEMENT IN RESPONSE TO ASA RULING

The successful MG advertising campaign, promoted in newspapers, magazines and on poster sites throughout the UK since July, has been suspended following an ASA ruling.  The distinctive 'Full Fat, High Caffeine and Maximum Strength' ads promote the new MG ZR, MG ZS and MG ZT, but a complaint from an individual has been upheld.

The complainant felt that the abstract background, bold headline and 'Life's too short not to' strap line conveyed 'a car travelling fast, objected that they placed an undue emphasis on speed and encouraged irresponsible driving'.

John Sanders, Group Marketing Director, MG Rover, said: "We are very disappointed with this conclusion.  The ads have been very popular since July, resulting in tremendous interest in the exciting and dynamic new MGs, but the reaction of an individual has changed all that.

 "We make no apology for the fact that the new MG range is faithful to the MG tradition of producing genuine sports cars.  Communicating the performance characteristics inherent within any MG means an inevitable dynamic association, with the excitement that comes from driving these cars.

"The MG brand is dynamic, exciting and for individuals who like to 'live life to the full'.  The advertising campaign does not talk about speed; it is designed to appeal to people who like the freedom to make their own choices and not be dictated to by the current obsession with denying oneself the pleasures of life."

Much of the ruling concerns the blurred background and spinning wheels - a technique used widely by all manufacturers to illustrate motion.  The imagery of the car was intentionally pin-sharp and placed on a none-real-life background, to reduce the importance on speed.

It is unfortunate that one single individual has taken offence to our approach, particularly as it seems that the general public's response to our MG launch has been overwhelmingly positive.  Interest in the cars has been unprecedented, with thousands of orders being taken.

MG Rover will be discussing the matter with the ASA to try and understand better the basis of their judgement.  It has never been our intention to encourage the use of speed in inappropriate circumstances or conditions, and this is reflected in the fact that only one complaint has been received.

Note:
The ASA ruling applies to the poster and magazine campaign - and not the TV advertisement.

During the media launch of the new MG range, we deliberately provided off-public road facilities for journalists to test these cars and going forward, we will be offering similar opportunities to customers.

Two MG ZRs have achieved an impressive debut result with a class win in the 2001 World Cup Rally, finishing 1^st & 3^rd in the 1.4-litre class and 4^th & 6^th overall.

On Sunday (September 30) two MG ZR 105s set off from Brooklands to compete in the London-Sahara-London rally. The cars covered over 6,000 miles of gruelling and varied terrain in 20 days, competing in 28 test stages.

The first MG ZR was driven to the finish, first in class and fourth overall, in the capable hands of Andy Dawe and his co-driver Simon Sparey. Andy has previous experience of competition rallying with his father Doug Dawe in Longbridge produced products.

The second MG ZR, which finished third in class and sixth overall, was registered in Portugal and driven by Shirley Greenway, who made her rally debut. Her co-driver Andrew Johnson acquired the MG ZR 105 in Portugal and took it to the UK for the fitment of safety equipment.

The suspension was refitted with increased ride height, front strut brace and competition dampers. Brake and fuel lines were replaced with race-standard Aeroquip hoses with special routing inside the cabin for ensured performance and durability. Other special items included the fitment of Sparco competition seats, five-point harnesses, fire extinguishers, a rally trip computer, aluminium fuel tank and sump guards. The car was finished in distinctive XPOWER grey and bright green livery.

MPG MARATHON CLASS-WIN FOR MG’s ECONOMIC PERFORMANCE

In another competitive outing, the first diesel-powered MG – the new ZR Turbo-diesel, has won its class in the 2^nd RAC/Fleet World sponsored MPG Marathon. The MG ZR Turbo-diesel achieved an outstanding 65.4mpg over the 480 mile route.

The MPG Marathon started, and finished, at the RAC Supercentre by the M5/M6 junction in north Birmingham. The route covered 480 miles taking competitors over a demanding route to the North, including the Hardknott and Wrynose passes in the Lake District and across the Pennines.

Winners in each class were those that exceeded the official government Combined Fuel Economy figures by the greatest margin. Entrants employed practical economical driving techniques while driving within a set schedule.

John Dalton from MG Rover Group was accompanied by Peter Brill, Head of PR at the RAC and the results show that they achieved an outstanding 65.4mpg. This represents a 22% improvement over the official Combined Fuel Economy figures, set by the government cycle tests for the ZR Turbo-diesel of 53.8mpg – making it probably the most economical MG ever.

Commenting on the success, John said: "My target had been to achieve 70mpg, but given the new MG ZR had only covered 1000 miles, and the demanding nature of the route – using many narrow country lanes and moorland roads with steep climbs and descents – I’m very pleased with the result. It proves that the MG ZR Turbo-diesel is a good all-rounder – quick and agile sports handling, that is great fun to drive, safe and a great economic performance."

SHOWROOM INITIATIVE

MG saloons are currently supported by a high profile marketing campaign. Potential customers who visit MG showrooms to look at the new MG Saloons are given the chance to win an MG ZR in a prize draw or the chance to win a six-day shark diving holiday in South Africa, followed by a six-day game safari.

MG ZR WITH 1 YEAR’S FREE INSURANCE

For purchasers of the exciting new MG ZR, drivers aged 25 and over can qualify for 1 year’s free insurance and for drivers under 25 years of age there is an opportunity to insure through this incentive with an incremental premium.

Rover announces a range of 'Olympic Impression' Special Editions that feature additional levels of equipment over the popular 25 and 45s.  All Olympic Impression SEs feature Olympic 'Team GB' and 'Impression' livery and will be supported by a high profile marketing campaign.

Potential customers visiting Rover showrooms before October 22 will qualify for a free 'Active bag'.  Rover supports UK Athletics and Team GB as Official Car Supplier and is also promoting the chance to win a Rover 25 Olympic Impression SE or a trip to the Olympic Winter Games in Salt Lake City, Utah in February 2002.

Rover 25 Olympic Impression and Olympic Impression 'S' special editions feature 15" Octet alloy wheels, remote central door locking and come in a range of sporting colours: Alumina or British Racing Green, Tahiti or Midnight Blue, Platinum Silver, Sienna Gold and Solar Red.  The Olympic Impression 'S' also features air conditioning, electric front windows and a CD tuner.

The Olympic Impression 84Ps 1.4 3-door is priced at £8,740, Olympic Impression 'S' 1.4 3-door at £9,560, 5-door models are an additional £500.

Rover 45 Olympic Impression editions are available in either saloon or hatchbacks with a range of engine choices: 1.4-litre (in 5-door body style only), 1.6, 1.8 and
2.0-litre turbo diesel.  All Olympic Impressions feature a range of extras including air conditioning, CD Tuner, electric front windows, electric door mirrors and come in Platinum Silver, Copperleaf Red, Solar Red, Steel Blue, Midnight Blue and British Racing Green paint finishes.

The Olympic Impression 'S' has further enhancements with the 5-door models featuring 15" Fission alloys, a rear spoiler, front fog lamps, leather steering wheel and gearknob.  The 4-door Saloon versions, already well specified, are enhanced with 16" Cosmos alloys and leather seat trim.

Prices of the Olympic Impression SEs range from the 103Ps 1.4-litre 5-door, at £11,480, to the Olympic Impression 'S' 2.0-litre turbo diesel saloon at £14,650.

PRICING

LOW RATE FINANCE

ROVER 25 and 45 models, including Olympic Impression SEs are available with low-rate (9.9% APR) finance through MG Rover Independence Personal Contract Purchase (PCP), producing monthly repayments of: 

£89 per month (Rover 25 1.1i 3 door)
£99 per month (Rover 25 Olympic Impression 3-door)
£139 per month (Rover 45 Olympic Impression 5-door)

A three-year free servicing offer is available to all Rover 25 and 45 models, except 1.1i, 1.4i, 1.1iE, 1.4iE derivatives.  Other low-rate finance packages are available with APR % repayments ranging between 9.9% and 5.9%, dependent on the deposit contribution.

Normal terms and conditions apply, available on request at MG Rover dealerships

The ASA have recently upheld a single complaint regarding an advertisement for the Rover 75. The advertisement linked the outstanding strength and structural rigidity of the Rover 75 to its excellent handling characteristics.

In this instance, we do not accept the claim that we have misled the public in our advertising to promote the virtues of the Rover 75, and particularly the benefits derived from its class-leading bodyshell strength.

We still believe that the Rover 75’s strong body and torsional rigidity are contributors to the worldwide praise it has received for its remarkable ride comfort, quality and superb road manners.

However, because we subscribe to the ASA’s voluntary code of practice, this particular campaign will not be used in future.

Note: The Rover 75 ‘discus thrower’ advertisement ran between January 2001 until August, before the ASA ruling of 3^rd October 2001.

MINI CLASSIC SAFETY RECALL

A total of 5809 Mini Classics produced between August 1996 and January 1999 and registered in the UK are being recalled over a concern associated with the rear wheel bearings.

Some isolated reports have been received that identify the possibility of premature wheel bearing wear as a result of water ingress.  Although such a condition would normally be detected during routine servicing, the recall is being instigated to minimise customer concern.  If left unchecked, the issue could lead to failure of the bearing assembly, although related noise and vibration would make this easily detectable by the driver.

Owners of models in the affected VIN range are being informed by letter today and are requested to contact their local MG Rover dealership who will arrange for the rear wheel bearings to be replaced free of charge.

The recall has been organised in accordance with the 'Code of Practice' concerning vehicle safety issues drawn up by the Vehicle Inspectorate and the Society of Motor Manufacturers and Traders.

Today at the Frankfurt Motor Show, MG Rover Group released early details of their Monogram programme.

Available across the entire MG and Rover ranges, the Monogram programme will offer a wide choice of carefully selected exterior paint colours, trim materials and technical components, thus enabling customers to personalise their vehicles. The elements of this programme will be introduced on a progressive basis with completion planned for spring 2002.

Commenting on this initiative, John Sanders, group marketing director at MG Rover Group stated: "The Monogram programme will encourage customers to express their individuality in the car they drive. It will incorporate a wide range of carefully chosen items to create a personal ambience."

Featured at the Frankfurt Motor Show will be the first vehicles to receive some elements of the Monogram treatment. The Rover 25 is finished in Oxygen Blue with matching interior, the MG ZT XPower 385 is painted in Typhoon – a new multi-colour pearlescent that flips from purple to green – and the MG X80 is painted in Chromosphere – another trichromatic colour whose spectrum turns from hot red to fiery orange.

FRANKFURT MOTORSHOW SPEECH - X80/ZT385

SEE THE MG ROVER STAND AT FRANKFURT BY CLICKING HERE (MOVIE)

Good afternoon ladies and gentlemen and can I say how significant today is for us at MG Rover – and as we know, playing away in Germany has recently been very successful for British brands!!.

But seriously though, since our last international press conference at a major motor show, at Geneva in February, we have continued to deliver as a company on our business plan and commitments.

Strategically, the acquisition of the Longbridge powertrain business from BMW at the end of May this year was another milestone on our road to success. And I think some of you were probably taken a little aback when we announced the purchase of a second company in June with our agreement to buy the Italian subsidiary of the Qvale Automotive Group. This again was a strategic move to ensure we had the best possible platform to develop our luxury performance sports car, code named MGX80.

And our presence here today emphasises the strategic importance we attach to the German car market and our plans to rebuild and develop the Rover and MG brands and our distribution network in this vital European market. As many of you know, we don’t attend all motor shows ‘just to follow the crowd’, but we do see some real tangible business benefits in showcasing our products here today and, just as in Geneva in February, we have more to show you than many would have predicted.

Let us start with the Rover brand, and the Frankfurt IAA marks the first time the new Rover 75 Tourer has been at a major show in Germany. This is particularly important to us as it’s the first Rover estate in the compact executive market. This sector accounts for over 700,000 sales across Europe each year and within that number Germany accounts for over 300,000 of these.

The 75 Tourer has been very well received by the international motoring journalists that have driven it and I am delighted that its here today given that it is the very first new car to be launched by the new MG Rover Group.

The Rover brand will remain the volume brand for our group and will account for the dominant share of our sales and production over the next 5 years. The Rover 25 and 45 have been well received since they were launched in Europe in the spring of 2000, which for obvious reasons was perhaps not the ideal time for the new models to appear. But once we had bought the company we repositioned and relaunched them and we will continue to develop these important cars. In particular, our best selling car the Rover 25 is now the largest car in the small car sector and has engines from 1.1-litre to 1.8 plus a 2.0-litre turbo-diesel. Today, we showcase the Rover 25 "Monogram" concept, which incidentally will also be offered on all Rover models and on MG’s as well. This will allow buyers to personalise their car in a wide variety of ways with an infinite combination of exterior colour, interior trims and technical components.

Turning now to the MG brand, I remember a few people were rather in disbelief when I announced in January of this year that we would be introducing a complete range of MG saloons, including a rear wheel drive V8 engined car. Not only have we developed and recently launched 3 new MG sporting saloons and an MG sports wagon, but today I can reveal to you for the first time as part of the MG ZT line-up, the XPower 385 that IS rear wheel drive, DOES have a 4.6 litre V8 engine producing 385 PS and WILL be on sale next summer. This is the road going development of the ZT Extreme, and with a price of under £40,000 it will deliver the power for money promise of the MG brand. This car will propel you to 100 kph in less than 5 seconds, onto 160 kph in under 11 seconds and will reach 282 kph where it is legal. And yes, there will be a ZT-T version. Ladies and gentlemen- the top of our MG ZT range, the XPower 385.

(CAR IS REVEALED FROM UNDER A UNION JACK)

However our commitment to the development of the MG brand does not stop there and as you can see we also have the MGF XPower 500 on the stand today, following its debut at Le Mans in June. We believe sports roadsters and coupes are at the heart of any great sporting brand and the MGF remains the epitome of the accessible sports car. But we have always felt that to be a global sporting brand MG should also have an icon product at the top of the family tree. By acquiring the Italian subsidiary of Qvale we have been able to use the excellent chassis and powertrain of their sports car project in our

MG X80. Peter Stevens our Design Director, and his team, have been working flat out on this project since June and today I am delighted to reveal for the first time anywhere in the world the MG X80 2+2 Coupe. It will be on sale next summer and will be joined by a roadster in 2003. We will offer a variety of power outputs from 260 to 385Ps produced from 4.6-litre V8 engines. And again the MG promise of more power for the pound, or should I say more excitement for the Euro, will be there.

Ladies and gentlemen - the MG X80 Coupe

MG ROVER HOLDINGS LTD ANNOUNCES A NEW POWERTRAIN PARTNERSHIP (see Powertrain)

Following swiftly from its acquisition from BMW of the engine and transmission business at Longbridge (Powertrain Ltd) earlier this summer, today MG Rover Holdings announced a new commercial partnership with PTP Ltd.

To strengthen its ability to identify and support an increasing range of customers, Powertrain Ltd – the MG Rover Holdings subsidiary – has appointed PTP (Power Train Projects Ltd) as its exclusive distribution sales agency for its K Series engines and major units.

PTP, based in Hinckley, have an enviable record of working with original equipment and sports car specialists and have now established an international sales and technical evaluation unit for MG Rover’s award winning K Series engine family.

Gordon Poynter Commercial Director at Powertrain Ltd, an MG Rover Holdings Company, said: "I am delighted we have been able to secure the services of PTP Ltd as an integral part of our team to increase sales of the K Series engine family worldwide. With its lightweight construction, high torque and power to weight ratio, the K Series is a competitive engine package."

Powertrain Ltd is a MG Rover Holdings Company, which employs 1300 people at Longbridge (Birmingham), producing 4 and 6 cylinder K Series engines and PG1 Gearboxes. The company has an annual turnover in excess of £300 million and customers currently include MG, Rover, Land Rover, Lotus, and Caterham. The KV6 2.5 litre engine will make its debut in the USA later this year as the exclusive power unit to be used by the Land Rover Freelander in its first entry to the USA market. In 2002 Powertrain Ltd will produce over 200,000 K Series engines and 76,000 gearboxes.

See: Powertrain Ltd          

MG Rover Group are pleased to announce that they will be the new official shirt sponsor for the Rugby Union team, London Irish, for the forthcoming season.

Along with the new sponsorship deal London Irish will be introducing new home and away strips. The home strip will be based on an olive green shirt with an ecru strip running down each side. The MG Rover name will appear on the front of both home and away shirts.

Geoff Read, chairman of London Irish, said: "The club is delighted to be associated with such a prestigious company as MG Rover Group.  We are looking forward to working with all concerned in the UK, Ireland and mainland Europe so that we can capitalise on the exciting marketing opportunities offered by rugby union at present."

John Sanders, group marketing director at MG Rover Group, commented: "The home ground for London Irish is the superb Madejski stadium in Reading, one of the best facilities in rugby thus offering the perfect environment to entertain both dealers and customers. The team plays throughout the UK, Ireland and in major European competitions bringing yet further awareness of the MG and Rover brands both in the UK and Europe."

On 11 September 2001 at the Frankfurt Motor Show, MG Rover Group will reveal two new MG models.

The MG Rover Group stand number is A12 located in Hall 4.0 which can be accessed by the main entrance in Theodor-Heuss-Allee.

These new product reveals will take place at a press conference on the MG Rover Group stand commencing at 12:00 midday.  

MG ROVER RANGE GEARS UP FOR PLATE CHANGE

September sees the launch of a brand new registration plate format across Britain and with it comes a wider, stronger and more exciting range of MG and Rover cars than ever before.

September’s plates will be the first with the new registration mark. From now on the format of plates will consist of two letters followed by two numbers to denote the area and date of first registration respectively. These will be followed by a further three characters that will provide a random element to the plate.

As the new plates arrive the dealerships are gearing up with the Rover 25, which has been the company’s best selling model amongst 25-34 year olds. With three- and five-door body styles, it is powered by a range of petrol engines – 1.1-litre, 1.4-litre, 1.6-litre and a 1.6-litre with Stepspeed auto transmission - and a 2.0-litre turbo diesel with 240Nm of torque that provides pace and economy.

Distinguished by the stylish four-headlamp design and a curvaceous body, the Rover 25 emphasis on chassis development maximises driver involvement and enjoyment.

All Rover 25s feature comprehensive specifications that include driver’s airbag, power assisted steering, 60/40 split fold rear seat, stereo radio/cassette and alarm system all standard equipment. Burr walnut features on the contoured fascia with useful oddment compartments too.

With electronic multi-point fuel injection, programmed ignition and hydraulic tappets for optimised efficiency, petrol versions can stretch 15,000 miles between service intervals.

In the medium sector Rover offers a five-door hatchback and a longer four-door saloon, powered by engines from 1.4-litre, 1.6-litre, 1.8-litre and 1.8-litre with Stepspeed to a silky-smooth auto 2.0-litre V6. With four airbags, ABS and air conditioning, the Rover 45 gives owners a safe and comfortable environment.

The long wheelbase gives it a natural, handling stability on all road surfaces, which combine with taut, dynamic suspension and steering responses that give one of the smoothest rides in its class.

Interior trim materials enhance the cabin ambience, with exceptional comfort from the front seats, which are similar in design to the Rover 75. Other attractive features include plip activated central door locking with co-ordinated interior illumination, remote stereo controls on the steering wheel and reverse sensitive wiper blade activation on hatchback models.

Heading up the Rover range, the 75 has an established reputation for being stylish and majestic. Now available in Saloon and Tourer body styles, the car has won countless international product accolades, a top-five UK JD Power customer satisfaction survey result, high NCAP crash safety performance and good residual values.

Rover 75 redefines ‘travelling in style’, delivering advanced levels of comfort, safety, security and performance.

The Rover 75 Tourer is MG Rover Group’s first production Rover estate car in the compact-executive sector. Its combination of style, comfort, flexibility and a capacious load carrying potential of over 1200 litres, will ensure that the Tourer matches the success of the saloon.

The MG product range has expanded this year, starting with new entry and performance models for the UK’s best selling sports car – the MGF. Brand new are the MG saloons, the ZR, ZS and ZT, arrived just weeks ago and will be followed by a new luxury performance sports car – codenamed MG X80 – which goes on sale in the summer of 2002.

The ZR is a particularly attractive sports saloon, built in 3- and 5-door body styles and available in a variety of engines and trim levels at affordable prices to cater for all market needs. Involving performance is guaranteed - whether the ZR is powered by the 1.4-litre K Series, L Series turbo diesel or the 1.8-litre K Series with manual or Stepspeed transmission. The top-performing model is the ZR 160 with the verve of the 160Ps 1.8-litre K Series with Variable Valve Control, and a 0-60 performance of 7.4 seconds.

All MG ZRs feature body coloured exterior styling; side rubbing strips, door handles and mirrors, bumper inserts, tailgate lift, aerodynamic tailgate spoilers, front and rear bib spoilers. Black headlamp bezels and bright mesh main and lower grilles complete the distinctive appearance.

ZR is tuned with a sporting chassis set-up for agile and responsive cornering dynamics. Rapid steering response, throttle adjustability and direct steering feedback are all key to the driver enjoyment of this ‘pocket-rocket’.

MG’s new ZS sports saloon has a distinct dynamic character, race-track looks and a powerful engine and is the basis of the company’s entry into Touring Car racing. With a powerful and smooth six-cylinder engine, rare in a car of this size and unique at the price, the range-topping MG ZS 180 will excite sports-minded drivers.

The interior has special colour co-ordinated sports seats, Rhodium silver fascia detailing and silver instrumentation. The MG sports steering wheel and gearshift use an alloy and leather combination design.

Heading up the new MG saloon range, the ZT models bring a new sporting aura to the upper-medium and compact executive car sectors. Two power outputs are available - 160Ps and 190Ps - from the quad-cam alloy 2.5-litre KV6 engine.

True to MG’s sports pedigree, the MG ZT makes a strong visual impact with a purposeful stance and style. A body coloured aerodynamic rear spoiler is available, which has been harmonised with the front bumper design to substantially reduce aerodynamic lift, improve straight-line stability, control high-speed lane change characteristics and increase braking efficiency.

The interior features fascia panels and console finished in Rhodium silver, with matching silver finished instrument dials. The traditional MG octagon badge is at the centre of the black leather trimmed steering wheel, perforated on the grip sections.

Guy Pigounakis, commercial director said: "We now have a complete range of cars to suit the needs of every local customer whether it is a stylish family run-around or a stunning high performance sports car they are looking for. MG Rover cars are second to none and will thrill all who are lucky enough to drive one."

MG ROVER ANNOUNCES FURTHER SUCCESS IN FLEET MARKET

MG Rover's success in the fleet market continues with the company now signed up as the sole supplier to the John Menzies Group.  In a contract worth £11m at showroom prices, MG Rover, in partnership with Arnold Clark Finance, will supply up to 1000 cars over 3 years to John Menzies and associated companies.

Through a highly competitive tender process MG Rover emerged as the front runner and the manufacturer best able to match John Menzies' requirements.  Ian Kelly, John Menzies Group transport manager, said: "We are delighted with the outcome of the tender process, which has further reaffirmed our confidence in MG Rover and its products."

Angus Gray, MG Rover fleet sales director added, "We're naturally very pleased to have been awarded this most valuable contract.  The John Menzies fleet is one of our largest solus deals and although we have supplied cars to them for the last 17 years, in today's competitive environment we viewed this opportunity very much as new business."

This is a further major success for MG Rover Group and follows on from a contract signed with the Compass Group in April.  Fleet buyers have been encouraged by strong residuals and the low running costs the MG Rover models now offer.  The award of these contracts demonstrates the returning confidence in MG Rover within the fleet and leasing industry.

Angus Gray continued: "The Menzies contract is the biggest solus fleet deal we have secured since the formation of the new company.  It is a further reflection of our commitment to and growing presence in the all-important fleet market."

We make no apology for the fact that the new MG range is faithful to the MG tradition of producing genuine sports cars.

Communicating the performance characteristics inherent within any MG means an inevitable association with ‘speed’ and with the excitement that comes from driving these cars.

However, it has never been our intention to encourage the use of speed in inappropriate circumstances and conditions. During the media launch of the new MG range, we deliberately provided off-public road facilities for journalists to test these cars and going forward, we will be offering similar opportunities to customers.

MG has always had a heritage of combining safety and performance, indeed the brand is often best remembered for the slogan ‘Safety Fast’. Furthermore, we recently co-operated with the West Midlands Constabulary to provide additional MG cars to assist their control of speed on the motorway network.

It is unfortunate that one or two individuals have taken offence to our approach, particularly as it seems that the general public’s response to our MG launch has been overwhelmingly positive. Interest in the cars has been unprecedented, with thousands of orders being taken.

We will of course comply with the ASA ruling, when developing new communications material.

 NB: The ASA ruling applies only to a pre-launch direct mail leaflet and magazine insert campaign - not to the current advertising on Poster boards and TV.

NEW TOP-SPEC ROVER 25 1.6 iXL

A new high specification Rover 25 is announced - the Rover 25 1.6 iXL. Its standard specification includes metallic or pearlescent paint, full leather trim, air conditioning, ABS with Electronic Brakeforce Distribution (EBD), passenger and driver airbag and available in either 5-speed manual or Stepspeed (six-speed manual or automatic) transmission.

Priced at £13,980, the 1.6 iXL represents great value, with its combination of features valued at £4500 over the 1.6-litre Rover 25 iL, for an inclusive customer price of £2600.

The Rover 75 has been acclaimed as the ‘Best Used Medium Car 2002’ in Used Car Buyer magazine’s annual awards, beating stiff competition in the Medium sector.

Jim Lynch, MG Rover’s after sales director, said: "Having enjoyed a Rover 75 since launch, I can recommend the ownership experience. Available in a choice of four engine and three trim variants, the levels of refinement are class-leading, its stylish looks are very desirable and there is a real pride of ownership to be experienced. A fifth-place in the 2001 JD Power customer satisfaction survey and winning another award for the Rover 75 in the after sales arena are vindication of the Rover’s product desirability, reflected positively in high residual values."

Commenting on the Rover 75’s excellent achievement, Used Car Buyer’s editor, Ian Cushway, said: "It is a great car that has levels of refinement that set it apart from the crowd. Given the choice of a Vauxhall or Ford it is no wonder that many used buyers have now decided to invest in the much-classier Rover badge. Even compared with the middle-ranking German opposition, the 75 holds its own with a uniquely-British character. It is comfortable, well equipped and now becoming ever more affordable."

Today MG Rover Group announced results for the 8 month period ended
31 December 2000. The main highlights are as follows:

The loss of £(254)M was less than half the operating loss incurred in the full year 1999 (c£(780)M). This represents a significant improvement in the underlying business performance. The overall year end cash position of £329M was ahead of the business plan and included the £200M long term loan from BMW. The achievement of 111,800 retail sales was ahead of the business plan by 900 units. Furthermore the level of sales in the most profitable markets and customer channels was higher than planned. A summary of other achievements to date and an outlook statement for 2001 are attached.

Kevin Howe, Chief Executive said: "Our 2000 performance was better than our business plan in all respects and represents a major step towards our target of overall business profitability. During the year we have made progress in many areas. We reduced by more than half the operating loss of the business, consolidated our production on the Longbridge site, entered new overseas markets and introduced five new models to our existing MG and Rover product portfolio."

• By August 2000 we had consolidated the separate Rover 25 and 45 production lines to accommodate the facility transfer of the Rover 75.
• The Rover 75 production facilities were relocated from Oxford to Longbridge in just 12 weeks. This major engineering task was completed successfully by early October, resulting in improved production rates and vehicles being built to better quality standards than those previously achieved at Oxford.
• Two internationally acclaimed engineering and design directors have been recruited to lead the product assault. The benefit of their knowledge and expertise has already been felt, in particular in the creation of our new MG range of vehicles.
• Over £100M was invested in the five new models, the Rover 75 Tourer, MG ZR, MG ZS, MG ZT and MG ZT-T, which are being added to the existing product portfolio.
• New national sales companies have been established in the major European markets and new overseas markets have been entered with the appointment of new importers in Norway, Sweden and Australia.

• In April First National Motor Finance (part of Abbey National plc) were appointed to provide dealer and retail financing packages in the UK market. Similar arrangements have been put in place with other financial institutions in mainland Europe.
• In May we resolved the outstanding issues with BMW and settled the completion accounts balance sheet. This resulted in MG Rover receiving £65M in cash plus the Longbridge Powertrain business.
• In June we announced that we had reached agreement with Qvale to acquire its sport car business, which will enable us to introduce a new premium end MG Coupe and Roadster product in 2002. This flagship model will both enhance the MG brand and complete our current offering of MG saloons and sports cars.
• We are in the process of taking full ownership of our Parts business. In January we announced a 10-year agreement with Cat Logistics, one of the world’s leading companies in this field, to manage our logistics and distribution activities.
• Over the past year we have been actively developing the Longbridge site to transform it from a manufacturing unit to an International Headquarters. The establishment of an on-site test and analysis facility, research and development areas, a sales and marketing centre and visitors reception and showroom are all near completion. With the recent acquisition of the Powertrain business we now have the opportunity to finalise a long-term plan for the total site, bringing with it improved efficiency and workflow.
  

We are currently working to a calendarised operational budget for the year 2001 which, when achieved, will deliver another major step towards our objective of having a profitable business in the year 2002. In financial terms we plan to reduce our annual loss for 2001 to significantly below the £(254)M loss figure we have reported today.

For this present year, some of our major business goals include:

• An annual sales volume of over 180,000 cars supported by the sales launch of our MG range of models, the ZR, the ZS and the ZT, the launch of the Rover 75 Tourer, and for those who want the best of both worlds the launch of the MG Sportswagon – the ZT-T.
• The expansion of sales into new importer markets in Argentina, South Africa, New Zealand, Mexico and Switzerland.
• A major re-entry into motorsport. Two cars were entered in the Le Mans 24-Hour Race last month. In terms of both speed and endurance, their performance exceeded all expectations, given the very short development period. We have also announced our future participation in Rallying and Touring Car events.
• In the near future we will determine and announce which of the routes we will take to deliver our new medium car scheduled to go into production in 2004.

MG LOLA EX257 LE MANS SPORTS CAR TO WOW SPECTATORS AT 2001 GOODWOOD FESTIVAL OF SPEED

The MG Lola EX257 Le Mans sports car, fresh from its debut at Le Mans 2001, will wow spectators at the Goodwood Festival of Speed, held between Friday July 6 to Sunday July 8, 2001.

Kevin McGarrity, renowned for his quick laps of the Le Mans circuit during the recent 24-hour race and Anthony Reid, a Le Mans veteran, will ‘demonstrate’ hill runs in the MG Lola EX257 sports car.

Goodwood is the spiritual home of British motor racing and the Festival of Speed is the greatest event on the historic racing circuit. From 25,000 visitors at the inaugural event in 1993, the Festival of Speed has gone on to attract in excess of 110,000 in its eighth year.

This year’s Festival of Speed is shaping up to be an exciting event. Over 225 cars are expected to ‘take to the hill’ and more than 25 historic cars worth over £20 million will be specially flown in from around the world for spectators to view.

MG-ROVER ANNOUNCES A NEW LUXURY HIGH PERFORMANCE SPORTS CAR

Today MG Rover announced that it had entered into an agreement to purchase the assets of the Italian subsidiary of Qvale Automotive Group. The company, based in Modena, Northern Italy employing 70 people, manufactures the Mangusta sports car.

Using the outstanding chassis and engineering of the Qvale project, coupled to a 4.6 litre V8 powertrain producing up to 380 Ps, MG Rover is designing a new luxury high performance sports car. Today the first design sketch is revealed of the new car code-named MG X80 and styled by MG Rover’s world renowned design director Peter Stevens.

The MG X80 will be launched in 2002 giving the MG brand a world class product in the high performance luxury sports car sector. Both coupe and roadster versions are planned with manual and automatic transmissions. The new car will be positioned above the existing MGF roadster, the new MG sports saloons and sports-wagon that will be launched this summer.

Kevin Howe, chief executive of MG Rover said: "The MG X80 will be an excellent fit at the top of our family of MG cars. It also provides an opportunity to look at markets where we are not currently represented. In particular the USA market, the world’s largest sports car market, where we can now seriously evaluate the full potential for the MG brand."

Bruce Qvale, president of Qvale Automotive Group said: "MG Rover showed an interest in our Mangusta car project in Modena and we have agreed a good deal for both sides. The power of the MG brand now takes the project forward on a global basis". See Qvale X80.

ROVER 75 PERFORMS WELL IN EURO NCAP SAFETY TESTS (5 June 2001)

In the latest round of Euro NCAP tests, Rover 75 performs well, placed third in the frontal collisions ahead of the Volvo S80, Saab 9-5 and Audi A4, equal first in the side impact and fourth overall, despite not being qualified for the inclusion of the Pole test results.

Euro NCAP have stated that the "Rover 75 put in a strong performance. If the side impact head-protecting airbag had been standard equipment and not an option, the 75 would have come close to matching the Laguna’s five star rating".

The Euro NCAP side impact requirements for rib deflection is a movement no greater than 24mm to achieve good performance; the Rover absorbed the impact with a deflection of just 13mm.

Rover 75 is a popular choice in the premium upper medium and compact-executive sectors and in a recent JD Power customer satisfaction survey, the 75 was placed in the top fifth position. Built at Longbridge, to highly exacting quality standards, the 75’s bodyshell has class-leading integral strength with a torsional rigidity measured at 24,250 Nm per degree.

Strong intrinsic safety performance for this robust design has been made possible by using laser-welded blanks to absorb front-end impacts. The hydro-formed front sub-frame strengthens the front end, but also lozenges under offset impact, which absorbs crash pulses. The bodyshell uses high strength steels extensively, which contributes to the protection offered by the extremely strong bodyshell.

Side pole tests were conducted to demonstrate the 75’s ITS head protection system and the two additional points were not included on the basis of it being an optional feature. Euro NCAP stated that "the car passed, confirming that the head protecting airbag works well".

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