WARWICK, England - Chairman John Towers and other executives at newly independent MG Rover Group say they are having fun planning a new generation of vehicles.
Freed from BMW's ownership, they don't have to answer to bosses in Munich anymore, and they can make decisions quickly and nimbly.
Towers and his company will need all the agility they can find to surmount the obstacles they face. In order to succeed, they must come up with a new business model.
MG Rover is a small company in an increasingly global car business. With plans to produce 200,000 cars a year, MG Rover doesn't really qualify as a volume carmaker.
Without the brand names or the right products to demand top prices, MG Rover can't compete in the premium car league either.
And Rover plans to make all its vehicles - as many as eight different models - at its only factory in Longbridge, near Birmingham in the English midlands.
'The volumes are not economic. It's as simple as that,' said Charles Moss, analyst for J.D. Power-LMC in Warwick, England. 'When you go to a parts supplier with those limited numbers in mind, it becomes very hard for the parts supplier to give you good economies.'
To get better economies, MG Rover needs a larger partner to help it develop a new-generation lower-medium car. Malaysian carmaker Proton has been linked with the MG Rover, but it denies that any deal is imminent.
Cracks have begun showing in Towers' management team. Two non-executive directors - Brian Parker, a British financier, and Terry Whitmore, an executive with UK coachbuilder Mayflower - resigned October 26. Both issued statements blaming their resignations on 'intense media pressure.' They said they still support Towers.
Towers, the man who put together the Phoenix consortium to win the bidding for Rover in the summer, defended his company against criticism.
'No matter what the gossip column journalists are saying, we're on track,' he said.
'We've already invested 100 million (E173.2 million) in new products and we will be building more products at Longbridge than ever before.'
MG Rover's new structure has resulted in savings, Towers said.
'Previously we had to pay the overheads of the Gaydon test center, the engine plant in Warwick and the plant at Cowley,' he said. 'We have identified savings of 50 million a year just on travel and accommodation - we have become more compact and cost effective.'
MG Rover is still negotiating the settling of its accounts with its former owner BMW. MG Rover would like to buy the engine plant at Longbridge. BMW still owns the plant, although 80 percent of the output goes to MG Rover in the form of five different engine types. If MG Rover loses to another bidder in the stakes for the engine plant, it faces the prospect of having to negotiate engine prices with an outside supplier.
Head of Product Development Rob Oldaker and his team are working on options in case a car manufacturer/partner cannot be found to help develop MG Rover's future lower-medium car. They are making contingency plans to develop a new car off a scaled-down version of the Rover 75 platform if no major automaker partner emerges.
MG Rover has a dowry of about 500 million from BMW, and doesn't have any debts.
'The dowry gives the company breathing space to keep production running,' said Moss. 'But it doesn't give it enough to develop a new range of cars, which would require new engines, and would incur full development costs.'
Three new MG sedans are being developed. These are sportier versions of the Rover 25, 45 and 75 and should go on sale next year. A station wagon version of the 75 has also been developed. The car was on display in the lobby of MG Rover's Bickenhill headquarters during October's Birmingham auto show. The company decided early it wouldn't spend unnecessary money showing cars at auto shows, a decision that drew some criticism.
'Consumers don't want to buy a car from a company that has to advertise the fact it is short of cash,' said Moss.
But MG Rover will have a stand at this month's Sydney auto show in Australia, and may be at the Geneva auto show next year with the Rover 75 station wagon and possibly one of the new MGs.
Towers admitted the company has a job to do rebuilding the brand image of MG in Europe, where it is not as strong as Rover.
Kevin Howe and John Parkinson, MG Rover chief executive and marketing chief respectively, have been touring continental Europe to keep dealers informed of developments. Sales of Rovers have increased in most key European markets this year. The exceptions are the UK and Germany, the company's two largest markets.
Chris Wright contributed to this story