In 1994 BMW paid £800 million for the Rover Group, the home of Rover, MG, Land Rover and Mini. Six years later it sold the Rover and MG part of it for £10.
That sounds like a disaster, and for Rover it was. But two things came out of those years that are still with us: a MINI built in Oxford and a Rolls-Royce built in Sussex. This is the story of what BMW bought, what it sold and what it kept.
It follows on from The history of BMW, through British eyes, which covers everything up to this point.
Open the snapshot: the whole story in five points ▾
- In 1994 BMW paid £800 million for the Rover Group, the home of Rover, MG, Land Rover and Mini.
- BMW invested heavily, but Rover never made a profit. In 2000 BMW broke the group up: Land Rover went to Ford for £1.8 billion, and MG and Rover went to the Phoenix Consortium for £10. MG Rover went into receivership in 2005.
- BMW kept Mini. Its all-new MINI has been built at Cowley in Oxford since 2001, with body panels pressed in Swindon.
- In 1998 Volkswagen bought the Rolls-Royce car company, but BMW bought the right to the name. BMW has built Rolls-Royce cars at Goodwood in West Sussex since 2003.
- Rover is gone, but Oxford still builds MINIs and Goodwood still builds Rolls-Royces, both because of decisions made in Munich.
In this article
- 1994: BMW buys Rover
- 2000: why BMW sold Rover, for ten pounds
- MINI: the one BMW kept
- Rolls-Royce: bought twice, by two different companies
- BMW and the British police
- Where it stands today
- Test yourself
1994: BMW buys Rover
On 31 January 1994 British Aerospace sold its 80 per cent stake in the Rover Group to BMW for £800 million. The sale caused uproar in the House of Commons. A German company now owned Rover, MG, Land Rover and Mini, along with dormant names such as Triumph and Riley.
It also ended a partnership. Honda owned the other 20 per cent of Rover and had worked with it for years, with several Rover models based on Honda designs. Within a month Honda announced it was selling its shares to BMW and walking away.
BMW invested heavily. The most visible result was the Rover 75, a gentlemanly saloon launched in 1998. Years later, after BMW had sold Rover, a V8 version became one of the great British Q cars. But the money did not turn Rover into a profitable company, and the losses kept growing. One estimate puts the total cost to BMW at fifteen billion Deutschmarks.
2000: why BMW sold Rover, for ten pounds
Rover’s losses kept growing, and in 2000 BMW gave up and broke the group apart.
- Land Rover, with its Solihull factory, went to Ford for £1.8 billion.
- MG and Rover, with the Longbridge factory, went to a group of investors called the Phoenix Consortium for a nominal £10.
- Mini stayed with BMW, along with the Cowley factory in Oxford and the pressings plant in Swindon.
MG Rover lasted five more years. It stopped production and went into receivership on 7 April 2005.
BMW also held on to the Triumph and Riley names when the group was broken up.
MINI: the one BMW kept
The original Mini had been in production since 1959. The last one was built at Longbridge in October 2000, and it was the 5,387,862nd.
BMW’s replacement went on sale in July 2001. It was an all-new car, and it was built at Plant Oxford in Cowley, on the site where Morris had made cars.
It worked. By April 2007 the BBC was reporting the millionth MINI built at Oxford. The car is a British team effort: body panels are pressed in Swindon, and engines have been built at Hams Hall, near Birmingham.
The electric story is less settled. BMW announced in 2017 that an electric MINI would be built at Cowley from 2019. In 2023 it committed £600 million to upgrading Oxford and Swindon for a new generation of electric cars. Then, in early 2025, it paused the Oxford upgrade, saying it was reviewing the timing because of uncertainty in the car industry. It also agreed not to take a £60 million government grant tied to the project.
Rolls-Royce: bought twice, by two different companies
The Rolls-Royce deal of 1998 is one of the strangest in motoring history.
The owner, Vickers, put Rolls-Royce Motors up for sale. BMW offered £340 million. Volkswagen outbid it with £430 million and won. But the Rolls-Royce name and badge did not belong to the car company. They belonged to Rolls-Royce plc, the aero engine maker, which had worked with BMW and chose to license them to BMW for £40 million.
So Volkswagen had bought the company, and BMW had bought the name. The two agreed a handover. Volkswagen carried on building Rolls-Royce cars until 2003, which gave BMW time to build a new headquarters and factory at Goodwood in West Sussex.
The first car from the new company, the Phantom, was launched in January 2003. Rolls-Royce Motor Cars is wholly owned by BMW, which is why its cars use BMW engines: the Phantom’s 6.75-litre V12 was made by BMW specifically for it. BMW expected to start with a workforce of about 350. Today Rolls-Royce Motor Cars employs about 2,500 people. It sold a record 6,032 cars in 2023, and its first electric car, the Spectre, was revealed in 2022.
BMW and the British police
For years BMWs were a familiar sight in police colours. West Midlands Police ran diesel 3 Series as traffic cars, and a former traffic officer I know well tells a story from those days that no brochure would. One station kept its cars in an underground car park. The cars were rear-wheel drive and on summer tyres. When snow or ice arrived without warning, they could not get up the ramp, and the traffic cars stayed where they were until it had been gritted and cleared.
The relationship ended on a far more serious note. On 26 January 2020 PC Nick Dumphreys of Cumbria Police died when the diesel engine in his BMW patrol car failed on the M6 as he responded to an emergency call. The inquest heard that similar engine problems had occurred in police cars before, linked to the way police vehicles are used: long periods of idling followed by hard acceleration. BMW said there was no need for action on any civilian cars.
In January 2023 BMW stopped supplying cars to UK police forces. It said demand for its cars was outstripping supply, and that it would put retail and company customers first and move away from some of its specialist business.
Where it stands today
More than thirty years on, the Rover purchase looks different from how it looked in 2000. Rover is gone. But Oxford is still building MINIs and Goodwood is still building Rolls-Royces, and both are doing so because of decisions made in Munich.
Whether BMW saved those two names or simply bought them is an argument for the pub. What is not in doubt is that a large part of the British car scene now has a German owner, and has done for a generation.
Test yourself
Ten questions on this story. Try it now, then come back in a week and see what stuck.
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