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Rover environmental analysis


This has begun a gentle shift in the demand of cars. Smaller cars are becoming more popular by both private and business buyers and low emission diesel cars are becoming the norm as company vehicles. These two changes have had a significant effect on MG-Rover. The company built the Rover 75 to fit the new company taxation system but its smaller vehicles (a significantly growing market) are over 10 years old and uncompetitive in the market place hence adding to declining sales.
             VAT was last increased in the UK in 1991 under the Tory Government from 15% to 17.5%, which is outside our ten-year analysis. However if the UK considers joining the single currency it is likely that VAT will rise to European levels of around 19%. Further increases in VAT would damage levels of demand in the economy and further add to the woes of MG-Rover. (Although a 1% rise in VAT would bring in an extra £3.6Billion for the government).
             Transport Policy.
             Over the last 10 years we have had two different governments with similar ideologies when it comes to transport policy. The idea it would seem is to improve public transport and reduce the number of cars on our roads therefore reducing congestion and pollution. Despite all attempts by these governments, car registrations will top 2.5 million in 2003 a figure not seen since the late nineties pre-recession days. Professor Garel Rhys predicts sales to top 3million by 2010. So what is the government doing to slow car registrations and to promote the use of public transport? Firstly their investment in rail networks is stunning in its size. In 2003/ 2004 £61Billion will be invested in the rail networks over a number of years whereas only £59Billion will be invested in our roads over the same period. Congestion charges have been put in place in London during 2003 with more to follow and the first pay/mile motorway opened in Birmingham in November this year.


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