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SCMP Reporter

A battle among German car-makers erupted yesterday after Volkswagen (VW) and Bayerische Motoren Werke (BMW) both confirmed they were in the bidding to buy Britain's prestigious Rolls-Royce Motor Cars company.

 Following an announcement by the defence manufacturing group Vickers that it planned to sell Rolls-Royce, VW and BMW are the first to reveal their interest in the company.

 US group General Motors Corp and Germany's Daimler-Benz both denied yesterday any interest in Rolls-Royce, but industry sources said Daimler could still emerge as a late entrant. Ford is also regarded as a contender in any bidding battle.

 Reports that VW had already won were quickly dismissed by Vickers yesterday.

 'It is too early for any decision. Lazards [the investment bank] was only appointed 10 days ago to prepare the sales document and market Rolls to interested parties,' a Vickers spokesman said.

 'Any suggestion at this stage that any party has secured Rolls-Royce is incorrect,' he said.

 The company has been valued at GBP200 million to GBP600 million (about HK$2.62 billion to $7.87 billion), and a sale is broadly welcomed by investors who want Vickers to concentrate on its defence business.

 BMW has a strong foothold in Britain, as the majority owner of Rover, and has recently won an engine supply contract for Rolls.

 VW is also a key contender, particularly after issuing a statement this week that it would not rule out an acquisition in the motor industry.

 The company wants to be a more potent competitor to BMW and Mercedes-Benz by launching more prestigious and luxury models, and is thought to view Rolls-Royce as the perfect platform through which to realise its ambitions.

 Acquiring Rolls-Royce would give VW firepower to fight against Mercedes, which unveiled a super luxury concept car at the Tokyo motor show in October. Called the Maybach, it is expected to compete against Rolls-Royce.

 A VW acquisition of Rolls would quickly lead to an end to the deal by which BMW would deliver engines for the new generation of Rolls and Bentley vehicles.



German car-makers lead pack as battle heats up for Rolls