Iran wants to revitalize MG Rover
Country hopes to breathe life into collapsed British carmaker
April 25, 2005: 9:04 AM EDT
 

TEHRAN (Reuters) - Iran said Monday it was still interested in buying MG Rover, and that it hoped to breathe new life into the collapsed British carmaker rather than just strip it of assets as one Iranian automaker suggested.

Britain's century-old carmaker, which once made sturdy Land Rovers and sleek MG sports cars, stopped production after failing to secure a rescue deal, an embarrassing blow to Prime Minister Tony Blair in the run-up to next month's parliamentary elections.

"Some talks have been held; we're now in the assessment stage to see what the ceding terms are," Iran's Minister of Industries and Mines, Eshaq Jahangiri, told reporters.

"We reckon our auto industry is capable of reforming a troubled European carmaker and churning out a car to world markets under the same brand," he said.

Iran Khodro, the Middle East's largest carmaker, has said acquiring Rover would not fit with its plans. SAIPA, Iran's second-biggest, has said it would be interested in salvaging parts from the British firm.

But Jahangiri said a full buy-out could still be on the cards, particularly if Iran were to team up with other Asian countries.

"I think Iran and China, and maybe India at a later stage, can manufacture some Rover parts in their countries," he told reporters.

Iran Khodro and China signed a contract on Sunday to jointly produce the Samand, Iran's new national car, in China.

After news broke Friday about Iranian interest in buying the collapsed British firm, the conservative press voiced its objections, recalling what it called the "Talbot story."

In the late 1970s Iran bought the production lines to manufacture the boxy Paykan, formerly the Hillman Hunter made by the Talbot company.

"By buying that collapsed company then and transferring its outdated technology, Iran rescued the company, but held its auto industry back for 40 years," the hardline Kayhan daily wrote on Saturday.

Paykan production will end next month, the minister said.

Iran Khodro now has ambitious plans to produce a million cars a year by 2011 and has begun setting up factories in the Middle East, Africa and former Soviet states.

"This is not a story like the Paykan. I don't think they want to sell the production line for the car to be manufactured elsewhere," Jahangiri said, explaining Britain's priority would be protecting domestic jobs.

"The British government will be looking for someone who can re-launch Rover there (in Britain)," he added.

Jahangiri said Rover's research center could still design cars after an Asian takeover. Some of the parts would then be produced in Iran, China and India before being assembled back in Britain under the Rover brand.

He said an Asian solution would bring down prices.

"It's Rover's best bet," he concluded.

Jahangiri did not comment on whether London's close relations with Washington, Iran's arch-foe, would present a political obstacle to any potential Iranian buy-out.