For many, the demise of MG Rover did not begin last week, nor even last year, but more than 30 years ago, even before what was then the component parts of the UK car industry were nationalised under the British Leyland banner.

After more than a decade of declining sales through the 1960s, characterised by outmoded production processes and old-fashioned management practices, Leyland, the conglomerate of world famous car brands such as Austin, Morris, Triumph and Rover, was nationalised in 1975. It soon became regarded as a black hole into which ever greater amounts of public money disappeared, amid industrial turmoil during one of the worst periods for workforce disputes.

By the mid-1980s, under Margaret Thatcher's Conservative Government, the de-nationalisation of Leyland saw the car manufacturing behemoth broken up, with the Rover Group - by now concentrating on upmarket saloons - sold to British Aerospace.

For a while, a liaison with Japan's Honda seemed to offer some hope.

But the long-term decline of heavy industry in western Europe could not be reversed, however, and even the archly efficient Germans of BMW were defeated when they had a stab at turning around the Rover brand in the 1990s.

The decline in sales has been terminally steep: from selling nearly 220,000 cars, a 12 per cent share of the UK market, in 1993, last year MG Rover (including the successful but niche MG sports operation) sold just 76,000 vehicles, or just 3 per cent market share.

BMW's keenness to dispose of the company ought to have sent warning signals at the time. So much so that they eventually offered an interest-free loan of £427 million and sold the business as a going concern to the union-favoured Phoenix Consortium in 2000.

BMW's eagerness to exit the situation was no doubt helped by the fact that they retained the hugely successful Mini marque, where they continue to produce cars at Cowley, Oxford, while another profitable part of the overall business, Land Rover, had been acquired by Ford.

Phoenix were left with a prestige sports marque in MG, plus a dated and unattractive series of Rover cars, without ever possessing the production scale or the investment means required to challenge in the mass market.

Poor exchange rates hampered export sales, an earlier Chinese link-up had failed, and although losses were reduced, the company just could not get into profit quickly enough.

"The Phoenix plan could have worked but everything had to go right," said Professor Garel Rhys, director of the centre for automotive industry research at the Cardiff University Business School.

"The MG marque has been greatly revived. Sales of MGs have rocketed but Phoenix could not sell enough Rover cars abroad. They were not helped by the exchange rate.

"Phoenix were able to reduce losses but the plan was to get into profit by 2003 and increase profits in 2004. That did not happen and the new medium-sized car did not materialise."

Prof Rhys said that, looking even further back, Rover had had a successful partnership with Japanese car giant Honda.

"But BMW broke the links with Honda and thought they could make a go of Rover. The end for Rover really came when BMW bailed out in 2000.

"Rover has always needed help. It needed urgent assistance in the mid-1970s and between 1975 and 1984 a total of £3.5 billion of taxpayers’ money went into the company."

Steve Cropley, editor-in-chief of Autocar, said some people had grown "sick of watching Rover struggle" but he added that Phoenix had enjoyed some "extraordinary successes".

"Foremost among these successes was the rapid, cheap and highly successful debut of a range of MG saloons so enticing that they were selling quite well last month, amid all the Rover mayhem."

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