£100m debt for MG Rover dealers

CAR dealers left with thousands of unsold MG Rover vehicles on their forecourts have joined the stricken carmaker's suppliers as potential businesses on the critical list following the company's demise.

Dealers in Rovers and MGs have called on the CBI to intervene as fears grow that collectively dealerships could be left with £100m of debts.

CBI director-general Sir Digby Jones is meeting Trade Secretary Patricia Hewitt today to plead the dealers' case.

Insolvency specialists are warning that bills for dealers could spiral after MG Rover's administrators, called in a week ago, said they would not honour outstanding warranties. Estimates are that dealerships around the country - some of which sell only MG and Rover cars - have been left with £25m of unpaid invoices.

Shares in quoted motor dealers have been on the slide over the past week, notably Caffyns which has several MG Rover franchises in Sussex and Kent.

The warnings over dealers come amid claims that the £40m of Government aid for MG Rover suppliers will not be enough in the coming weeks to stave off severe cashflow problems and potential closures.