MUNICH - BMW's Rover Oxford plant is working through the traditional two-week holiday building the new Rover 75 sedan.
BMW desperately needs the 75 in full production. BMW's earnings have been hit badly by Rover. For the first half of 1999, BMW net income dropped 27 percent from the same period last year to euro 191 million. Sales were euro 16.3 billion, up 3.3 percent.
BMW blamed the earnings decline on the phasing out of the Rover 600 and 800 Series, a decline in car prices in Rover's home UK market, and a more extensive reduction in the Rover work-force than originally planned.
Along with the 75, BMW is counting on continued strong performance of its own brand and continued robust sales of Land Rover.
The 75 sedan went on sale 17 June but has not yet reached full production of about 2,800 units per week. The vehicle has gone on sale in most major European markets, but has yet to be launched in other parts of the world. The 75 will eventually sell in 120 markets, 40 more than the previous 600 and 800. Rover has received 10,000 orders for the cars so far.
Andrew Blair-Smith, auto analyst for Commerzbank in Frankfurt, said BMW has begun improving, but is not over the rough times.
'Things can get better but they can't get good,' said Blair-Smith. 'The only way BMW can make a go out of Rover is if they can produce cars like the 200/400 cheaper than the competition or charge a premium. I don't believe the Rover brand has the kind of kudos to charge premium against Golf.'