ROVER-HONDA

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INTRODUCTION:
Rover was a British automotive marque used between 1904 and 2005. It was
launched as a bicycle maker called Rover Company in 1878, before manufacturing cars
in 1904. The brand used the iconic Viking longship as its logo.
Despite a state-controlled absorption by the Leyland Motor Corporation (LMC) in 1967
and subsequent mergers, nationalisation, and de-mergers, the Rover marque retained
its identity first as an independent subsidiary division of LMC, then through variously
named groups of British Leyland through the 1970s and into the 1980s.
The Rover marque became the primary brand of the then newly renamed Rover
Group in 1988 as it passed first through the hands of British Aerospaceand into the
ownership of BMW Group. Sharing technology with Honda and financial investment
during the BMW ownership led to a revival of the marque during the 1990s in its core
midsize segment.
In 2000, BMW sold the Rover and related MG car activities of the Rover Group to
the Phoenix Consortium, who established the MG Rover Group atLongbridge. BMW
retained ownership of the Rover marque, allowing MG Rover to use it under licence. In
April 2005, Rover branded cars ceased to be produced when the MG Rover Group
became insolvent.
BMW sold the Rover marque to Ford in 2006 for approximately 6 million, exercising an
option of first refusal to buy it dating back to its purchase ofLand Rover. Ford thus
reunited the original Rover Company marques, primarily for brand-protection reasons.
In March 2008, Ford reached agreement with Tata Motors of India to include the Rover
marque as part of the sale of their Jaguar Land Roveroperations to them, alongside
related Daimler and Lanchester marques. Legally the Rover marque is the property of
Land Rover under the terms of Ford's purchase of the name in 2006.
In the middle of the decade, SAIC Motor Corporation Limited attempted to acquire MG
Rover, but in 2005 was outbid by another Chinese automaker, Nanjing
Automobile. SAIC did manage to obtain some MG Rover technology that was
incorporated into a new line of luxury sedans under the Roewe marque.
With no Rover vehicles currently in production, the marque is considered dormant.








SWOT ANALYSIS OF THE CASE
STRENGTH:
Rover can build its brand.
It can come back into the market.
Having a JV with Honda was the big strength for a come back with new designs.

WEAKNESS
Rover did not have any new designs
They had to join with Honda which will acquire more shares
Customers are bored of the same old designs

OPPORTUNITY
Rover could get a good come back if they had come to the market with new designs.
They found Honda as an emerging company and made an agreement of joint venturing.

THREAT
Honda having the upper hand is a major threat for Rover because most of the revenue
woukld be acquired by Honda.
This might lead to further loss for Rover even when their brands are getting populared.













INTERPRETATION OF THE CASE:

1. The advantages that Honda had derived from its relationship with BL are,
Honda gets the major revenue made by the company
Honda had the upper hand in negotiations over design specifications
As rover was already not doing good, honda had the choice of playing the lead
role in this joint venture.
2. Yes, there were commercial risks for Honda in sharing its design skills with BL
because oncw when the designs are out and the other compaany comes to know
about the strategies used by honda that is going to be the most threatiest part
when some issues arise.
But as per the agreement made by the two company, rover agreed to pay
honda the major part of the revenue made by the company.
3. In our opinion, we would suggest a plan that the rover could have followed
They wouldnt have maintained the same type of cars
They should have spent more on research and devdelopment so that they
themselves could have made new designs and so there situation would have
been better even without having a joint venture with Honda
If at all they made a JV, they shouldnt have agreed to pay them the major part of
the reveneues made. It could have been a 50-50 agreement though.

CONCLUSION:
As regard to this case, Rovers mistake on not taking preventive measures and
not concentrating on the designs were the biggest mistakes. The R & D department
should have played a vital role before the situation had occurred.