Volkswagen Revives Bid for Rolls-Royce Motor Cars, Proposes British Engine Production

Strategic Insights -

Volkswagen, a German car manufacturer, has reignited the bid battle for Rolls-Royce Motor Cars, signaling its intent to top BMW's recent £340 million offer. Volkswagen's plan would involve building engines for new Rolls-Royces in the UK, a move that would secure a British base for engine production and counter concerns that production is being undertaken overseas. The company is also considering purchasing Cosworth, a British motor engine designer and producer, to further strengthen its bid. Volkswagen has indicated that it would retain the British management structure at Rolls-Royce and guarantee job security at the Crewe factory. The company aims to increase Rolls-Royce production fivefold, to 10,000 cars a year.

Key Takeaways:

  • Volkswagen is considering a bid of up to £380 million for Rolls-Royce Motor Cars.
  • The company plans to produce engines for new Rolls-Royces in the UK, securing a British base for engine production.
  • Volkswagen is also considering purchasing Cosworth, a British motor engine designer and producer, to strengthen its bid.
  • Cosworth's engines could be worth up to £40 million.
  • Volkswagen aims to increase Rolls-Royce production fivefold, to 10,000 cars a year.
  • The company has promised to retain the British management structure at Rolls-Royce and guarantee job security at the Crewe factory.
  • Legal arguments over the sale of Rolls-Royce Motor Cars are currently being considered by the European Court.
  • Volkswagen's supervisory board will meet next Saturday to discuss improving its takeover offer for Rolls-Royce.
  • The rival bid from BMW has been strengthened due to its existing engine deal with Rolls-Royce.

Statistics:

  • £340 million: the recent offer made by BMW for Rolls-Royce Motor Cars.
  • £380 million: the maximum amount that Volkswagen is considering paying for Rolls-Royce.
  • £40 million: the estimated value of Cosworth's engines.
  • 10,000: the number of cars that Volkswagen aims to produce annually at Rolls-Royce.

Sources:

  • "Volkswagen Revives Bid for Rolls-Royce Motor Cars", The Times, 1998.