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Royalty Wrangle

1115 Views 5 Replies 4 Participants Last post by  ExUser2
MG Rover is negotiating with Honda, the Japanese car maker, to be allowed to stop making royalty payments on the small and medium sized cars which provide the bulk of MG Rover's sales.

The Rover 25 and 45, and their MG counterparts, the ZR and ZS, are all derived from Honda's early 1990s Civic platform.

To be absolved from further payments would help MG Rover's return to profitability, although chief executive Kevin Howe said the company remains on course to achieve break-even later this year.

No Honda spokesman was available for comment last night on the progress of the royalty negotiations, or on a claim by senior MG Rover executives that the latest versions of the cars are now so far removed from the original Civic platform that no further payments are justified. However, there is a bitter history behind the royalty arrangements. Honda was deeply angered by ***'s unexpected 1994 takeover of the then-Rover Group, in which Honda held a 20 per cent stake and which was considered to be its long-term partner.

Part of Honda's conditions for unravelling the relationship was a strengthening of its royalties rights and an increase in the levels of payments, although these have never been disclosed.

If Honda is not willing to relent, MG Rover will face making further payments in the case of the Rover 45/MG ZS until 2004, when it plans a completely new replacement for the medium-sized cars.

Mr Howe said that a long-delayed announcement of precisely how they would be replaced will be made "in the next few weeks".
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Surprising that the big guns in ***s legal department allowed that to continue.

Its not very often that someone gets one over on the Germans.
Test only

I just wanted to make sure this worked, had a few problems now hopefully sorted out thanks to Jerry.

i would like to thank Keith adams for this imformation................

This particular Rover 200 was based on a shortened version of the 1989-1996 Rover 200 platform - and justifiably counted more as a British car than it's predecessor because all the engines used in this car were British..... the Petrol engines were all K-Series and the Diesel version was the L-Series power unit (related to the old Montego/Maestro engine).

I think that the common points between this and the previous Rover 200 were the suspension, chassis pick-up points front understructure. The dashboard bulkhead structure was shared, between the two cars, which meant that following the launch of the newer car, the old shape Rover 200 Tourer, Coupe and Convertible (which continued in production under the banner, "Rover Niche") received the new dashboard - as it slotted straight in.

This Rover 200 (which became the 25 - which begat the MG ZR) shares no common components (apart from engines) with it`s sister car, the Rover 400 (which became the 45 - which begat the MG ZS) as that was essetially a re-badged Honda Domani/Concerto.

An interesting parallel to this development tale is that in the absence of finding a collaborative partner, MG-Rover are pushing ahead with a mid-sized harchback to replace the 25 and 45, which is based on the underpinnings of the Rover 75 - essentially the front bulkhead, suspension pick-up points and four cylinder engines will be in common.....

Should mke for a cracking mid-sized car, given the excellence of the new 75

Keith Adams
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Very informative and much food for thought! Thank Keith, mention to him that I will link his site on my links page on my next update. Would you mind asking him if would reciprocate? I wouldn’t mind putting the information on the main site if he has no objections as well? :D

Is it worth expanding the pre Phoenix Forums, so that he can link to and discuss these cars? :)
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