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UK sought car deal with Iran before MG Rover collapse

London, April 21, IRNA-Senior British ministers were reported Thursday to have held a series of meetings with the Iranian government before the collapse of MG Rover, hoping a deal could have saved the UK's only remaining mass car manufacturer.

According to the Daily Telegraph, the talks involved Iranian firm, Dastaan, which had been negotiating with MG Rover since early 2004 over plans to assemble some 150,000 cars each year in eastern Iran - more than the entire output of the MG Rover group in 2004.

The first trial shipment of 2,000 Rover 75 and 45 models, worth Pnds 20 million (Dlrs 38 m) was said to have been due this month and in May and June, with another Pnds 30 m delivery later in the summer.

The reported exploratory talks with Iran coincided with the former British state car manufacturer trying to secure a joint venture with Shanghai Automotive Industrial Corporation of China, which also resulted in failure.

The shipments to Iran were apparently aimed to test the market and establish a trading relationship before Rover and Dastaan moved on to the assembly stage in 2006 that could have doubled the car company's production worldwide.

But according to the Telegraph, Dastaan began to have cold feet as reports reached Tehran about growing difficulties at the car's Longbridge plant in Birmingham, central England.

It quoted a senior British official saying that Trade and Industry Secretary Patricia Hewitt held six meetings this year with Iran's ambassador in an attempt to shore up the deal.

The talks, the paper believed, suggested that Labour's British government was more involved in the search for a rescue deal than has so far been revealed.

It reported that Foreign Secretary Jack Straw also discussed Rover in a series of meetings with the Iranian Ambassador to London, Mohammad Hossein Adeli.

But the Department of Trade and Industry was said to have refused to comment on the discussion other than specifying that the UK government "did all it to secure the future of the Longbridge site." A Foreign Office spokesman was also reported to have denied that Straw had played any role in negotiations to achieve a rescue deal to save Rover.

But Rover's chief of business development, Russ Thomas, confirmed that he had been in talks with Dastaan for about 15 months. "The plan was to start with units fully-assembled in the UK, then move next year to partial assembly," he said.

"Eventually, the idea was to reach full assembly of 150,000 cars a year. Had it been successful, it could have been very profitable," Thomas said.

It was believed that Dastaan hoped to build a Rover plant in Sistan-Baluchistan, which has a free-trade zone with special tax incentives for foreign firms.

Thomas suggested that the Iranian company seemed to be having trouble raising money, but official believed Dastaan's aim was to obtain Rover's intellectual property, brand rights and engineering capability, rather than set up a production plant.

Shanghai Automotive Industry is also reportedly hoping to buy Rover's brand name, which still belongs to the previous German owners BMW, in order to build 45 and 75 models in China.

Iran itself has a history of ties to the UK car industry, most notably with regard to the 1960s vintage Hillman Hunters, which was produced as the country's popular 'Paykan' models.

... Payvand News - 4/21/05 ... --

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