Financial difficulties may take MG and Rover to the end of the road ..... Price Waterhouse Coopers have been appointed as Administrators of the company that manufactures both these iconic British marques. But there is a lot more to this story than what meets the eye, so rather than speculate, the Next Car team will wait for further developments to unfold. We want to report news rather than report speculation! We'll have more details on this story as they develop in coming weeks. Maybe the company can be saved!

But today, the news is not good for the MG and Rover marques as the company endeavours to solve its financial crisis.

Over the years many car companies have hit hard times and as a result have faded into history. We won't attempt to name them all here, but Bolwell and Studebaker are just two such names. Nor will we attempt to analyse why a company fails. There are many reasons for failure, for example it could be poor management (which could cover financial management and/or sales management and/or production management and/or distribution management and much more). It could be political or civil unrest, which is of course outside of any companies control. It could be a changing market. It could be because of criminal activity. And it could be because of other reasons .... the list is endless. But failure isn't restricted to car companies. Nor are car companies immune from financial distress. Even automotive giants such as General Motors and Ford have experienced their share of financial pain. Mitsubishi Motors is just getting over their turn of feeling some financial pain.

And Phoenix Venture Holdings (MG Rover) are suffering financial distress at the present time. Prudently, the Board of Phoenix Venture Holdings have called in the Administrators. Many companies have successfully traded whilst under some form of Administration and have moved out of Administration and back into profitability. But it does need to be recognised that some companies do not survive. Since the Administrators were only appointed last Friday (8th April, 2005) it is far too early to predict what the outcome will be or what the outcome will not be.

There is a general election coming up in the UK soon. This may have some bearing on the outcome, because political considerations may have support for British industry as a key political issue in the Midlands (which is Britain's major car production area).

Will MG Rover be a target for a take-over? This is speculation, because it isn't known if any other car maker or group of investors are interested, but it is something that the Administrators will, no doubt, investigate. So who are the likely candidates for a take-over? Any take-over needs to be a win-win situation to make it a success. Not every car maker who could take-over MG Rover is capable of making any such take-over a win-win situation. In my analysis there is just one car company capable of a clear-cut win-win take-over. Then in the background, another three car companies have prospects of eventually making such a take-over a win-win situation (but subject to numerous considerations).

Phoenix was involved in negotiations with a Chinese car manufacturer. This was intended to be a saving manoeuvre for MG Rover, although I never recognised why it was so. This deal fell over. As a consequence, MG Rover is now facing it's 11th hour.

Although we've mentioned some of the options available to the Administrators, media speculation is unlikely to assist MG Rover. Accordingly, we plan to report facts only. And we trust the media will permit the Administrators and company executives to work together for the good of the company, suppliers, employees, dealers and shareholders.

Another failure amongst car companies isn't desirable. Industry consolidation over the years has reduced the number of players in the car making game. Does the world need to reduce, still further, the number of car makers in the marketplace?

All employees have been asked to report to work tomorrow, Monday 11th April 2005. Hopefully, this is to continue production ..... to continue the production of two great name-plates for the benefit of the world's drivers and to put the company on the road again!