BMW begins to lose orders, but it's Rover dealers who are panicking

Company sell-off: Motor Industry Federation declares jobs at the showrooms are in jeopardy because of false assurances about the future

There are 20 yards between the two car dealerships along one of London's most prestigious roads. But a gulf was developing yesterday between Rover's, Park Lane, and BMW, Park Lane.

At Rover's there is a sense of trepidation. The staff have been instructed to keep to a Trappist silence with the media. One employee said: "If there is a boycott of BMWs I have seen no sign of it around here. There are lots of people going into the BMW place down the road. They seem to be doing 'very well, thank you'."

The Rover showroom is a flagship. But at lunchtime yesterday, supposedly the busiest time of the day, the only "customer" walking around was a youth in school uniform.

At BMW the scene was very different. Three young Arabs were debating the comparative merits of the company's five and seven series, while Jeff Tyrell, a 29-year-old commodity broker, was deciding whether he should get his M coupé in midnight blue or flame red.

Mr Tyrell had looked at and considered the MGF a few doors away. "Nice looking cars, but would you really pay that kind of money for something linked with Rover? It's a hell of a risk; the company may go under and then what happens to spares?" he asked.

"I don't blame BMW for what they've done. They had put a few billion into Rover and couldn't save it. So they cut their losses. That's normal business practice," Mr Tyrell said.

He spoke as attention switched yesterday to the plight of the car dealers, not a usual target of public sympathy. Franchised Rover dealers complained that BMW had misled them about the company's attitude to Rover.

Many of the 300 dealerships in Britain invested heavily on the strength of assurances from BMW that Rover's future was secure, they said.

David Evans, chief executive of the Retail Motor Industry Federation, said that several thousand jobs were now in jeopardy in the dealerships. "BMW gave the assurance that they would sustain the franchise and, of course, the investment by the dealers was based on that kind of assurance," Mr Evans said.

Despite the scenes in Park Lane yesterday, the Rover establishments are not the only ones to suffer. At least one BMW outlet has lost an order because of the Rover crisis.

Sue Brownson, who runs a dealership in Manchester, said an order for a new BMW was cancelled in the past few days. "I am sure other orders are being cancelled because things are very emotive at the moment. But it is not the dealers' fault," she said. It should be remembered that BMW still employed thousands of workers in Britain, she added.

The continuing uncertainty is the main problem. Chris Cain, general manager of a Rover dealership in Muswell Hill, north London, said: "We don't know what's going to happen next, who will end up as our owner.

"People invested because they felt the future was safe. If the question of compensation comes it will need to be addressed seriously. We haven't noticed any downturn in sales here. In fact, last weekend was particularly good. If anything the public are showing loyalty. But it is all too early."

Some union leaders with, it is claimed, the tacit backing of Downing Street, want this loyalty to be taken a stage further to a boycott of BMW products. Tony Blair's official spokesman, Alastair Campbell, refused to criticise those demanding such a boycott.

At TSL, Putney, in south London, which stocks Rovers and BMWs, the general manager, James Watkins, said: "We have had a few cancellations of BMWs. Ironically, Rover sales started doing well because of the BMW connection - now some people seem to be blaming the parent rather than the child on this, although we don't know how long it will last."