Rolls battle all over bar the shouting

This would bring VW's total bid to #550m, way above BMW's #340m offer and probably well out of reach of the Rolls enthusiasts group, Crewe Motors, which had still not lodged its promised counter-bid yesterday evening.

A letter indicating that a bid was due, but containing no firm evidence of financial backing, was received by Vickers but this was not deemed sufficient to consider postponing today's shareholder meeting and a company spokesman said that shareholders were expected to endorse the VW bid.

A spokesman for Vickers said: ''It is not for us to comment on a bid that has not become clear, there is one by a British team that has been subject to speculation in terms of amount and backers.

''We can only act on the unconditional offers. If something is given in then it could be considered by the board as a duty to shareholders.''

Cosworth employs 1200 people in the UK and US, and its main factory is in Northampton where it has 700 staff. Its other UK plants are at Wellingborough, Hants, Northamptonshire, and Worcester, while it employs around 260 people at factories in Detroit, Michigan, and California.

Vickers chairman Sir Colin Chandler said: ''This is excellent news for all concerned and underlines the case for our shareholders approving the sale of Rolls-Royce Motor Cars to Volkswagen.''

The proposed Cosworth deal is key as Volkswagen, which topped BMW's bid last month, will need to develop an engine to power Rolls-Royce and Bentley cars. BMW has said it would cancel a motor contract with Rolls if Vickers' shareholders do not opt for its bid.

Volkswagen's pursuit of a luxury car line was part of the company's drive to fulfil long-term growth expectations, its chief financial officer Bruno Adelt said yesterday, adding that the acquisition of a luxury marque was ''a building block'' for a company extending its performance to meet these expectation, he added.

''We see positive effects for all classes of our cars through involvement in the luxury range,'' said Adelt, adding that he expects VW's involvement in top-range models to be somewhat more profitable than other sectors.

They revealed that Volkswagen planned to build its own top-range limousine should it lose the battle for Rolls-Royce.

Europe's largest car maker would not be thwarted from adding a luxury car to its range of VW, Audi, Skoda and SEAT cars if it failed to acquire Rolls-Royce, its chief executive Ferdinand Piech said at VW's annual

shareholders' meeting.

Although proving more costly and time-consuming to build its own luxury car, VW would not be diverted from entering the automotive industry's most prestigious market, Piech said.

''In the event that we don't win the bid we will realise an entry into the top luxury segment by other means. In this case our goal will be to go it alone,'' said Piech.

''Pursuing this avenue would, however, require more money and time to be invested. We've already had this experience with our higher range Audi marque,'' he added.

But Piech said that no decision would be taken to revive the Horch brand, owned by Audi, until after Vickers' shareholders had made their decision. Horch limousines were the pre-war favourites of millionaires and film stars.

Volkswagen is also considering plans to build a car plant to manufacture a new, top-range model in the city of Dresden irrespective of the outcome of its bid for

Rolls-Royce Motors.

The new model would be in a higher class than VW's Passat or in the luxury range and might be manufactured under its Skoda marque, with the focus on sales in Eastern Europe.

VW, which made a profit after tax of almost DM1400m last year, said yesterday that its five-month European car deliveries rose 9.6 % to 1.166 million cars. Western Europe remains its biggest market.