In 1994, BMW bought the British Rover Group (which at the time consisted of the Rover, Land Rover, Mini and MG brands as well as the rights to defunct Austin and Morris brands), and owned it for six years.
The purchase of Rover was not successful. Already struggling after years of industrial disputes, Rover had a poor reputation but in trying to improve its image it would become a rival to the BMW market segment. BMW found it difficult to reposition the English automaker alongside its own products and the Rover division was faced with endless changes in its marketing strategy. In the six years under BMW, Rover was positioned as a premium automaker, a mass-market automaker, a division of BMW and an independent unit. The 1996 documentary, When Rover Met BMW gave some insight into the difficulties faced by the two companies.
By 2000, Rover was incurring huge losses and BMW decided to sell off several of the brands. The MG and Rover brands were sold to the Phoenix Consortium to form MG Rover, while Land Rover was taken over by Ford. BMW, meanwhile, retained the rights to Mini (which was launched in 2001) and Rolls-Royce Phantom (which was launched in 2003).
Back in Germany, the 1995 E38 7 Series 725tds was the first 7 Series to use a diesel engine. The E39 5 Series was also introduced in 1995 and was the first 5 Series to use rack-and-pinion steering and a significant number of suspension parts made from lightweight aluminum.
The Z3 two-seat convertible and coupe models were introduced in 1995. These were the first mass-produced models outside of the 1/3/5 Series and the first model to be solely manufactured outside Germany (in the United States, in this case).
In 1998, the E46 3 Series was introduced, with the M3 model featuring BMW's most powerful naturally aspirated engine to date.
BMW Z3 (1995-2002)
Rover 75 (1998-2005)
