An incentive package is about to be announced by MG Rover dealers in an attempt to shift their remaining stock of new cars. Ireland's 21 MG Rover dealers on Monday met administrator PricewaterhouseCoopers, appointed to oversee the Irish assets of the British car-maker, and Permanent TSB which provided finance to the dealers, to try to resolve the situation over unsold new cars.
There are 400 unsold new MG Rover cars in Ireland, 150 obtained using dealer finance agreements with Permanent TSB. The other 250 are demonstration cars and those obtained by dealers either through direct purchase with MG Rover Ireland or other finance arrangements.
Dealers are concerned that, with PWC's announcement last week that there is no money to honour warranty claims, it will be difficult to sell the cars. However, after the meeting on Monday, it's believed that a special incentive package will shortly be announced whereby customers will be offered an attractive no-interest package. This is expected to be in place by May 10th, although this date could be brought forward if a warranty deal can be arranged earlier with a third-party supplier.
With such a deal in place, the remaining new MG Rover cars will be sold at zero per cent finance with a full three-year warranty.
The dealers say they are pleased with the support they are getting from Permanent TSB. Chris Hanlon from the finance company said: "We remain committed to MG Rover and its dealers. We are sure that together we can successfully trade out of this current situation. We believe there is still a value in the MG Rover brand." PWC declined to comment on Monday's meeting.
Meanwhile, the Financial Times has reported that dealers reprtesentatives in Britain have said that MG Rover dumped tens of millions of euro worth of unordered cars on to its dealers in the final months before it collapsed as it became apparent the car-maker was running out of cash.
Dealers vented their fury at the scheme - which provided an extra 3,000-4,000 unwanted cars to the British dealer network - at a meeting of the Rover taskforce last week.
The issue will be the focus of meetings this week between British dealers and Capital Bank, part of HBOS, which financed the cars through a triangular deal which released cash to Rover when cars were ordered but left the dealer liable to repay the debt after 180 days.
Rover also used its own dealerships, branded as Phoenix Venture Motors and now in administration, to raise much-needed cash through cut-price deals of up to 28 per cent on new cars in March, when the company was on the verge of failure.