Year 2006
Longbridge production of MG TF moves closer...
THE return of car production to Longbridge will accelerate today when a key supplier signs a £3 million deal to restart body shell production at the former MG Rover site. Stadco, which used to supply the parts for the MG TF sports car, is one of 150 suppliers who have agreed to provide components for Nanjing Automobile's (NAC) relaunch of the car next year.
Following a joint investment of more than £3 million, it has begun begin shifting part of its production from Coventry to Birmingham in a move which will generate up to 50 new jobs at Longbridge. The move, which is due to take place next month, could be followed by other manufacturers who have been approached to move to the factory.
The body shell facility had been mothballed at Stadco's factory in Holbrook Lane when MG Rover collapsed into administration in April 2005. But following the signing of the deal - which could ultimately be worth up to £2 million per year to Stadco - the new facility will be set up early in the new year.
The new unit, based in the CAB B building, will resume production by April and start full production in time for the relaunch of the new TF sports car in July. Early volumes of the car are expected to be around 4000 vehicles per year, although this could rise to meet demand. Stadco, which took over the panel making business from Mayflower which collapsed in 2004, will lose no jobs in Coventry.
It expects to take on former MG Rover workers and Stadco workers who lost their jobs during the MG Rover collapse. Paul Jaggers, product engineering director of Stadco, said: "Over the time I have spent with NAC I believe they are very serious about being in the UK and European market.
"We see this as an opportunity to build this product and also to work together. We are also discussing opportunities in China. We see this as part of our global expansion strategy. This could lead to work on other platforms for NAC and in China. We are pleased to be part of the rebirth of the MG brand. We have got an emotional attachment to it going back to the work we did on the MG F. Mayflower were key in getting that car on the road and made substantial invest-ments in its facilities to do so. We built the body shell for ten years, and know how it all works. We were a key part in bringing that vehicle to market and we will be again."
Andrew Morriss (CKD), managing director of Stadco, said: "This is an important stepping stone in the return of the MG TF. NAC has the will and the ownership and we have the skills and experience to bring this to reality."
Stadco is also involved in the modifications to the TF design, including remodelling of its interior trim, bumpers, lamps, as well as a possible hard top coupe version which could be introduced in 2008. As part of the deal, a team from Stadco will also travel to China to help establish a body shell production facility for NAC's new factory in Nanjing.
James Lin, operations director of NAC at Longbridge, said he welcomed the move, which could be followed by other suppliers. He said: "Stadco used to be an original supplier to Rover, so we know by working with them we can maintain the quality on important product. Stadco has also provided technical for our factory in China. This kind of project is the first stage in our global startegy. Stadco are good are engineering design and product development and have a very good understanding of the US market."
As well as manufacturers, NAC has signed agreements with engineering service providers like MIRA and Prodrive. Seating manufacturers and wheel companies have also voiced an interest in moving to Longbridge, said Mr Lin.
Wagn Hong Biao, chairman of Nanjing Automotive UK, said: "We are pleased to secure Stadco as a supplier because they bring a wealth of experience with them." Mr Lin, said: "There was rumours about us moving our operations to Coventry. That was wrong. What we are doing is moving Coventry operations to Longbridge."
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SAIC's 'Rover' breaks cover
SHANGHAI Automobile Industry Corporation (SAIC) has finally officially announced that its own brand name ‘Rong-wei (Roewe)’ will be applied to its version of the Rover 75, following the shock decision taken by Ford to retain the marque name for itself – and to complete the double whammy of news, a final prototype has been photographed, clearly showing the new badging and lightly altered styling.
The new car, which is called the 750 features the revised rear end as correctly predicted by www.austin-rover.co.uk, but holds few other technical surprises. The newly branded car is due to make its appearance later this month and forms the cornerstone of SAIC's ambitious plans to enter the premium sector with the 75-based car.
It's interesting to see that just like the original Rover 75Mk2, the Roewe 750 will be available with two frontal styling schemes. The 'E' version as you see here with the slightly altered 'Premium' grille arrangement and the standard cars as scooped last month.
According to its Chinese website, the Rong-wei brand slogan will make great play of the car’s great history – although the Rover marque now belongs to Ford, and it’s take on the historic nameplate has been invented from scratch – including the rather interesting logo.
SAIC has also announced that its successor the Rover 75 will be the core product in a line-up of cars to be officially unveiled on the 24th October. It is understood that SAIC Overseas (Europe) R & D centre (formerly Ricardo2010) will be jointly responsible for the new models, which is rumoured to include a new version of the ill-fated RDX60/130 project.
SAIC vice chairman and SAIC president Chen Hong said: “The starting point for the ‘Rong-wei (Roewe)’ marque is new – and will mirror the values of middle and high-end brands. SAIC has taken an important step in achieving its goal of becoming an international carmaker.”
Rong-wei (Roewe) will sit in the upper-medium sector of the market – targeting customers who have traditionally favoured premium products. SAIC will be using the Rover 75 platform as a starting point in the development further models which fit into this premium market brief.
The front-end styling of the 750E apes the Peter Stevens-styled 75 V8, although the treatment of the chrome is heavy handed. The revised interior somehow looks lighter and more contemporary - this is the most impressive aspect of the SAIC facelift.
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NAC-MG opens new powerplant factory
NANJING Automobile Corp, the Chinese owner of the assets of British carmaker MG Rover, said it will begin producing MG engines this month, a step toward reintroducing the oldest English car brand on the world market.
The company plans to manufacture 1.8-litre, 1.8-litre turbo and 2.5-litre V6 engines on MG assembly lines this month, according to a statement yesterday. The assembly lines were dismantled and shipped from Britain to the Chinese company's Jianglin plant in Nanjing after it outbid Shanghai Automotive Industrial Corp to take over MG's production facilities for 53 million pounds (US$100 million) last July.
"The move represents crucial progress for our car projects, and the power train systems are the most valuable assets," said Sun Honggen, general manager of Nanjing Auto MG Power Train Co Ltd. The power train program is part of the global revival plan for the British car brand. It follows a new vehicle plant in Oklahoma City in the United States in addition to resumed production at the old MG Longbridge assembly plant near Birmingham, England.
Nanjing Auto aims to produce 50,000 engines annually in another new plant in its home city starting next year.
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SAIC set to acquire global automotive consultancy Ricardo 2010
THE Shanghai Automotive Industry Corporation, the Chinese group with rights to the Rover 25 and 75, is expected to take over a West Midlands-based technological joint venture operation. Ricardo, the global automotive consultancy which runs the joint venture at its drive-train site at Leamington Spa, said yesterday that SAIC is expected to exercise an option to acquire the operation, called Ricardo 2010, before June 2007 for a nominal £1.
The research and development centre was set up as a wholly-owned Ricardo subsidiary employing about 150 mainly ex-MG Rover engineers in May 2005 to work on new cars for SAIC.
They are working mainly on a development of the 45, which essentially will be a new car designed and built to European standards. There are no indications yet where or when the new car will be launched or under what name.
Ricardo derives income by charged 2010 fees for managing and administering the R&D centre plus a service charge. Ricardo said in a note to its annual financial results statement yesterday that SAIC will keep the operation at Leamington and buy in administrative services from Ricardo.
The Sussex-based group yesterday reported underlying profits before tax for the year to June 30 of £14.5 million, an increase of 26 per cent over the previous 12 months. That figure excludes an exceptional payment of £3.7 million into the group's pension fund.
Turnover last year rose by nine per cent to £173 million.
Ricardo, which works closely with most of the world's major carmakers and Tier One components suppliers, said that despite the "continued challenges" facing the industry, its order book grew year on year to £72.2 million from £69.7 million and that it has a "strong pipeline of prospects".
The company's flagship projects include work on the world speed record-beating diesel-powered JCB vehicle and transmission systems for supercars such as the Ford GT and the Bugatti Veyron.
It is also working on clutch components for the MacLaren Formula One car. Chief executive Dave Shemmans said: "I am very pleased with this set of results that again show stronger revenues and growth in profits.
"Our Leamington operation is absolutely buzzing and is going from strength to strength."
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Ford buys Rover... name
THE prospect of Rover rising from the ashes was revived once again yesterday as Ford, the ailing American car manufacturer, bought the rights to the former luxury British car marque for about £6 million from BMW.
Ford is not expected to bring back the Rover in its old form — a quintessentially British luxury saloon — but is working on plans to introduce a range of Rover branded vehicles to fit within its Land Rover range, a source close to the company said. Ford was granted an option of first refusal to buy the Rover brand when it acquired Land Rover from BMW for $2.7 billion in 2000.
Ford, which did not disclose officially the financial terms of its agreement with BMW, said that it had exercised the right to buy the Rover brand to protect Land Rover, which is part of its Premium Automotive Group (PAG). “We believed then [in 2000], as we do now, that it is in the interests of the Land Rover business to own the Rover trademark,” Ford said.
Although Ford would not comment on the future of the Rover brand, sources said that the company wanted to build further upon its successful Land Rover brand in North America and has plans to design a so-called “crossover vehicle” using the Rover brand. “Land Rover could be one member of a new Rover family,” the source said, “with Range Rover and who knows what other kind of ‘Rover’.”
Crossover vehicles are smaller more fuel-efficient versions of the gas-guzzling sports utility vehicles (SUVs) that are becoming less popular in America. Land Rover already makes the Freelander, which is similar to a crossover vehicle, but it has not proved popular in the United States. The Rover brand was not included in last year’s deal to sell MG Rover to Nanjing Automobile Group, of China, which is planning to manufacture MG-branded sports cars at Longbridge, Birmingham, but it is understood that the Chinese company, and others, had expressed an interest in buying it.
The outside interest, which also came from Shanghai Automotive Industry Corporation (SAIC), of China, which owned the rights to build two Rover models before the company collapsed, is understood to have spurred Ford to exercise its option to buy the brand. SAIC is in a joint venture with both General Motors and Volkswagen to manufacture cars in China.
Ford made the surprise move yesterday, as it was revealed that the carmaker recently held brief preliminary talks about a merger or alliance with its arch-rival General Motors. The talks, between Don Leclair, the chief financial officer of Ford, and Fritz Henderson, his counterpart at GM, were held in August, but are not expected to be revived and no deal between the two is expected to emerge. GM has also been in talks with Renault, of France, and Nissan, of Japan, about a possible three-way alliance. The talks do not seem to have advanced since they were announced in July, however.
Ford and GM are struggling in the face of increased competition from Asian carmakers and rising labour costs.
Last week Ford offered redundancy packages to all 82,000 of its hourly unionised workers and said that it also would cut 14,000 salaried jobs.
The company declined to comment about the talks with GM.
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MG aims for 90 UK dealers
DUKE HALE, head of MG Cars North America/Europe Inc, has said that the TF Roadster will be sold through a 90-strong dealer network in the UK.
He was speaking, yesterday, at the Reuters Autos Summit in Detroit. He added that test models of the car will be ready in the early part of 2007.
In France, Italy and Spain, the plan is for the car to be sold through importers. He also re-affirmed plans to revive the British sports car in the US market by June 2008.
"Based upon our sales ambition and based on where we think our product line will be, we think we need to be looking at a dealer body that's about 300, up to 350 dealers," (in the US) Hale said. The company is preparing distribution plans aimed at large American cities. Dealers in the States will be required to run an exclusive MG showroom but share service and parts with other brands.
By 2010, he said the American venture could be selling about 100,000 unit's a year, made up of the TF Roadster, Coupe and a saloon car. The new company plans to assemble the cars in Oklahoma, based on kits manufactured by Nanjing in China. The company is currently preparing plans for the American factory. Similarly, the Longbridge site in England, will assemble cars from components shopped from China.
Asked if the 2008 launch date in the US was feasible, he said: "I think the timetable is fairly reasonable and not a stretch at all."
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New engines coming on stream...
IT looks like NAC-MG's plans to get its new-generation ZT based car (the 7Z) into production have taken a serious step forwards, with the imminent opening of a brand new engine building facility in the company's home city of Nanjing.
According to sources in the far East, the new engine building facility will be opened in front of the world's media on the 26th September - with an accompanying fanfare...
He told austin-rover.co.uk: "NAC-MG will open the new engine facility with a hiss and a roar, and what is being dubbed the N-Series engine will be revealed to the honoured guests and media."
The rapid pace of development clearly demonstrates that the Chinese are taking the MG rebirth very seriously indeed - and the company's results have shown just how quickly it can get things done - with the resumption of the production of new body panels, and their subsequent shipping back to the UK being one such project.
We also hear that SAIC is busily completing the final testing and chassis development of its own version of the new Rover 75 - Ricardo 2010's engineers are busy working in secret locations near the Gobi Desert in order to perfect the ride/handling compromise of its important new car...
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SAIC's Rover 75 finally uncovered...
IT'S here - and although it might not look new, SAIC's new 75 is a ground-up product which has enjoyed one of the shortest and most controversial development programmes yet seen in the motor industry - and we can't wait to see some more representative shots of this fascinating project.
SAIC's 'Rover 75' has been scooped in China, and as can be seen from the photos, it sports a 103mm longer wheelbase and new frontal styling. Previously known as the SAC528 project, the new car, co-developed by Ricardo in the UK and China, will be known as the Lu-sheng (literal meaning, 'Road-Splendor') in its home market, and will sport the K4- and KV6-Series engines in 1.8 turbo, and 2.5-litre form.
In Europe and the rest of the world, Lu-sheng will in all likelihood become 'Rover', as some members of the press seem to think that it's a done deal between SAIC and BMW for the ownership of the Rover name.
Styling
Recently spotted testing in mildly disguised form at Germany's fabled Nurburgring, the Lu-sheng features revised frontal styling and a rejigged rear end, in order to differentiate itself from the original car, which first appeared in 1998. Opinions are mixed on the effectiveness of the new front end, but the prominent new grille is certainly eyecatching, and will probably do what it needs to do in far Eastern markets in order to attract new customers.
Whether it's to European tastes is another matter entirely.
There are many people who consider the 75 Mk2 an act of vandalism - with many continental buyers decrying the Peter Stevens facelift for losing much of the original car's 'Britishness'. On those terms, what SAIC has achieved with this car is reasonably effective, and there's no doubting it's early days. Having said that, once it appears in Europe in 2007, we're looking at a 'new' car that's being launched with what is effectively nine-year old styling, and that's going to hurt - no matter how timeless the original was.
Engines
What is disappointing to hear from sources in China is that the Lu-sheng will be powered by a turbocharged 1.8-litre K-Series engine, and the 2.5-litre KV6, both of which are said to be only compliant with the EuroII and EuroIII emissions regulations. Although, as we have seen in the Powertrain story, Longbridge engineers had made this happen with the original engine, many of whom are now working for Ricardo 2010, the company now working with SAIC on the new car.
According to Chinese sources, the 1.8-litre K-Series is now called the 18K4G turbocharged engine, and it is matched with the SH78Z 5-speed gearbox co-developed by SAIC company and the German ZF company. The bigger engined car is powered by what is now known as the 25K4F engine (KV6 to you and me), and is mated with a AW55-51SN type five-speed semi-automatic gearbox.
As is now well-known, the K-Series head gasket 'issue' which dogged the engine to its end in Longbridge in 2005 is curable - will the Chinese be able to make it happen?
Equipment
Both cars come in two versions - low- and high-spec, although we suspect a snappier set of trim variations will be dreamed up. In 1.8-litre form, the high-spec version comes with electric sun roof, electric seats, electric rear mirrors as standard over the low-spec version. The V6 models will receive all the toys - DVD, Xenon lamps, bluetooth system for mobile phones, and parking radar as standard over the low-spec. It also gets visually more appealing 17-inch alloys...
The big question now is, how will it compare to NAC-MG's new 7Z saloon and Tourer, which are still months away from announcement?
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Shanghai pays BMW £11.5m for Rover name
Shanghai Automotive - one of the failed bidders for MG Rover - has bought the Rover name for £11.5m. Shanghai will announce this month it has bought the right to use the marque from BMW, which kept rights to the name after it pulled out of Rover in 2000.
BMW last night denied a sale, but The Birmingham Post understands a press conference will take place on August 22. A new badge has been designed. Shanghai Automotive Industry Corporation (SAIC) beat off competition for the name from Nanjing Automobile, the company which bought the assets of the Longbridge firm for £53m last year.
The name is likely to be used on the new Rover 25s and 75s SAIC plans to produce this year. A stretch version of the Rover 75 is also planned by SAIC, which won intellectual property rights to the cars. The Shanghai enterprise, which has worked with General Motors and Volkswagen, plans to invest pounds 900 million to launch 30 models with its own technology over five years.
An industry insider said: "Nanjing really wanted the brand, but only offered £500,000 because they didn't think BMW would sell to someone else. Nanjing thought they should have got it because they are at Longbridge and are carrying on the tradition. It is a UK name and part of the UK motoring heritage, they never thought BMW would dare sell to anyone else.
"Nanjing thought there would be pressure from press and public to keep the Rover name here, but it never happened. SAIC wants to sell cars on the international market and must have an international brand."
Peter Cooke, professor of automotive industry management at Nottingham Business School, said: "It would be logical for Shanghai to buy the Rover name as they have aspirations to get into Europe, although how strong the name is after all the years in the mire is another matter. Rover is a global brand and the Chinese are obsessional about brands. It is a high price, but brands are worth a lot of money and take a long time to build up. This is a brand that is available and could kick start their plans to sell internationally."
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MG: NACered?
ON July 17th, the dwindling band of loyal British car industry supporters were gathered together, begging bowls in hand, at a luxury hotel in London. What they were seeking was the charitable indulgence of China, still formally considered to be a developing country. Anticipation was running high in the slipstream of wild rumours regarding possible rescue by Nanjing Automobile Corporation (NAC) of Britain’s comatose MG sports car company. Hosted by the president of NAC, Mr Yu Jianwei, in attendance were luminaries from the Chinese embassy and various British consultancies. Mr Jianwei was the sole speaker. The conference was entitled “The Rebirth of MG”, serving only to stoke expectations higher.
China races to catch-up
THIS is not just an ironic position for the British company to be in. The Chinese must also ponder how fate brought them to this idyll of western decadence to brief hungry hacks on how they planned to save British automotive pride. While the British car industry has spent a generation in stagnation the Chinese industry has been racing ahead at a breakneck speed. The Chinese vehicle market is now the second largest in the world, 3.1m cars in 2005 and up by 27 per cent on the year before. However, the Chinese car manufacturers are not driving this phenomenal growth, they are getting sucked in behind it.
Only a quarter of car sales in China originate from domestic manufacturers. The rest are produced by joint ventures with foreign multinationals, a policy forced on the incomers in order to pull local companies up to global standards by way of technology transfers. They have been able to leap frog the normal stages of development and jump straight into the latest production technology. While the west gapes at this extraordinary progress the Chinese know that speed is of the essence. Membership of the World Trade Organisation (WTO) means that its low labour costs can be used to exploit global free trade to its advantage, Chinese textiles being a notable example. As the Chinese economy boils over these labour costs are being bid higher while fierce competition in the market place has put the squeeze on sales margins, now just 4 per cent among car makers.
Membership of the WTO also brings with it responsibility and by the end of this year China must abolish tariffs on automotive imports. In due course foreign companies will be allowed to own their facilities outright and then the nascent Chinese automotive industry will be totally exposed to the global industry. Chinese car manufacturers have about five to ten years to become fully independent before the ground is cut away beneath them. Despite fears in the west that China can industrialise exponentially faster than the Japanese or Koreans there is no particular reason to believe that this can be done without using external resources. For companies like NAC the quickest route to a global standard capability is to buy it abroad and bring it home.
Learning to make cars
ALTHOUGH NAC claims to be China’s oldest car firm it is at heart a commercial vehicle manufacturer. The only modern mass production it has tried has been with foreign partners and the success rate has been decidedly patchy. The core of its car making is a joint venture with Fiat but this has resulted in a desultory output. The parlous state that NAC has found itself in prompted the sudden move on MG Rover, snatching it from under the very eyes of Shanghai Automotive (SAIC). In the confusion of battle NAC came away with the British factory and the MG brand, while SAIC was left with the blueprints it had previously secured.
At the July conference NAC claimed that to be buying into the passion of MG. They seem to think that the passion of MG is embodied in the machinery that made the cars, from the stamping dies to the assembly lines. This has now been ripped out of Longbridge and shifted to China. It was conducted so ruthlessly that rumours of a few production machines left behind hinted at a secret strategy to restart them. Mr Yu Jianwei was delighted to tell us that a £10m investment would create 200 people jobs at the factory, churning out 15,000 MG TF sportscars per year, but these ambitious sales targets are riddled with uncertainty.
When MG Rover had its full complement of dealers it never sold much more than 14,000 TFs so it is unlikely to beat this when it will be 12 years old on its return. One analyst suggested that it would need a price cut of 30 per cent to offset its age and wounded brand image. Another suggested sales of around 2000 annually in Europe and 5000 in the US. This finds a parallel in the mooted 8000 roadsters a year from the Project Kimber facility in Wales.
In the meantime NAC are filling the brand new factory in Nanjing with the old MG Rover kit. Since the Chinese plant is Longbridge-in-exile capacity is a similar perfectly orthodox 200-250,000 units a year. This is enough to keep the company ticking over but well short of the million figure that would guarantee independence. The core of this tragedy is that NAC seem to be under the misapprehension the spirit of MG will spring forth from the physical assets. Walk into any car factory in the world and it will be virtually indistinguishable from any other. What NAC have bought is a second-hand factory for a knock-down price from which they can start churning out vehicles of a pensionable age. What they still lack is the ability to develop the badly needed replacements since that capability resides with the human assets, the engineers.
Physical assets without a human heart
THE announcement that the main R&D will be conducted in China indicates that NAC have not fully understood what strengths MG Rover had. The few new projects MG Rover managed to show the world were remarkably competent and completed on peppercorn budgets. What brought the company down was a lack of sales that exacerbated poor economies of scale. In other words, the advantage the company had in human assets was let down by the disadvantages in physical assets. Had NAC recognised how this would dovetail with their position in the fastest growing car market in the world the resulting structure would have been akin to an international vertical joint venture. Under NAC ownership the discrete functions would have been able to operate semi-autonomously in their home bases and so exploit their inherent assets.
In all probability NAC has wasted the chance of retaining the engineers at Longbridge that were at the peak of their careers. This comes at a time when Ford, the first car company to see the potential of internationalisation, has shown confidence in the UK as the knowledge base for advanced engineering. By not exploiting this British asset NAC show that they do not understand that expertise comes from years of team based experience, it is not something that can be learnt at night school.
If July 17th press conference projected nothing else it was that there is no coherent strategy in place at NAC. They are putting into production designs of more than ten years old and pitting them against the latest offerings from the global giants. The new models will either be released within a couple years but based on the current veterans, or else they will be all-new but appear years down the line and of unpredictable quality. There is no recognition of the potential that Longbridge could play as a bridgehead into Europe or as foundation for the Chinese facility. The Oklahoma plan barely figures in the strategy and seems to have run off on its own legs. The latest news from the US is that the MG R&D department will be partly staffed by students.
There are so few precedents to this predicament that it is difficult to find guiding examples. NAC are truck manufacturers of uncertain capability attempting to enter the big league in car manufacturing. It would be like British van maker LDV purchasing Lancia of Italy, shipping all the machinery over to Birmingham and then attempting to design the new range of cars, all while proclaiming to empathise with the Lancia “passion”.
In the same way the MG passion is not a dreamy vision but a genuine asset embodied in the engineering teams. Apropos this point, LDV have themselves become the victim of a foreign takeover, this time by Russian giant GAZ. On this occasion GAZ recognize the value of the new British asset, seeing it as a window on the West. Instead of stripping the factory they will use it as a launching pad for further expansion.
The last faggot on the homefire
EVEN the most optimistic British MG fan is now resigned to bad news. Chances are, the brand will flicker briefly once more then gutter and die. The only real hope is that it will be revived in the future but this time by a company that understands the spirit under the metal. Yet the prognosis for China and NAC is far worse. The Chinese automotive industry needs to transform itself, not soon but right this instant, if it is to have any chance of surviving the global challengers. At NAC’s July 17th conference those who attended were handed bags containing some sketchy press information and a couple of cheap souvenirs.
As we trudged home I had the feeling we were taking the passion of MG with us.
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Counterpoint: not all doom and gloom?
ONE thing's for sure - within the space of a few weeks the chances of seeing Longbridge return to life have increased enormously. Nanjing Automotive Corporation intends to turn MG into a global brand, and not only will cars be built in volume in China, but also in smaller numbers in Oklahoma - and Longbridge.
In reviewing the last year of the MG Rover story, one has to start in China. With Shanghai Automotive Industry Corporation (SAIC) beavering away at plans to launch, late this year, its own version of the venerable Rover 75, built in China, the story looks fairly straightforward. Unfortunately for SAIC, it has yet to secure the rights to the Rover name from current owner BMW. Rover's return to the UK remains in the balance, even though we'll be seeing something that looks and feels like a 75 in Ssangyong dealerships in 2007/2008.
The future for the MG marque, on the other hand, is looking a lot rosier now than it did several months ago, when no information was coming out of China, and there was nothing but an outflow of container crates, full of manufacturing equipment, leaving Longbridge. Nanjing, the successful bidder for MG Rover's assets back in July 2005, has been playing its cards very close to its corporate chest.
Pictures of an abandoned factory's interior gave plenty of ammunition for doomsayers to talk about the closure of Longbridge. Meanwhile, no spokesperson for the company stepped forward to deny rumours of the UK factory's imminent closure.
However, news started trickling out of Nanjing, and that soon became an outpouring. The company is all set for an international push for the MG brand, which it is repackaging as the 'Modern Gentleman'. A new factory in China is going up at a lightning pace, and Longbridge's former production lines are ready to go in.
The MG 7Z (formerly ZT) will be built over there - Chinese-built parts are already coming back to the UK to furnish depleted parts warehouses - in a brand-new facility, based a few miles from the centre of Nanjing city. The company has set itself a tough deadline to get full-scale production under way, as it wants new MG saloons to start rolling off the production line by Nanjing's 60th birthday, next April.
An intriguing three-pronged attack on the world's car markets was confirmed last week - and much to everyone's amazement, Nanjing announced that a brand-new production facility in the United States would be a kingpin in its ambitions to make MG a global player.
A coupé version of the TF convertible will be produced in Ardmore Airpark in south-central Oklahoma City, by MG Motors North America/Europe Corp.
After almost a year's silence from Nanjing, the company's strategy for the historic brand unfolded sensationally, and as well as announcing the first Chinese automotive plant in the United States, seasoned (some would say tactless) car executive Duke T Hale was confirmed as the chairman and chief executive.
Although the last MGs to be sold in the USA were 1980 MGBs, there's still a huge following for the company in the world's largest car market, and by producing the car over there, Nanjing-MG is hoping to cash in on the double-whammy of British heritage married to domestic production, thereby covering all the bases of the US car-buying public.
With Nanjing-MG about to live the American dream with new cars coming off the line by 2008, where does that leave the Longbridge factory and the fates of the still-unemployed factory workers, hoping to find work if and when production resumes?
Although there had been little communication from the Chinese regarding Longbridge, those close to the company's management remained confident that the factory would spring back to life.
Then, along with last week's Oklahoma announcement came the confirmation everyone was expecting - Longbridge would once again reverberate to the sound of car production.
Nanjing president Yu Jianwei said the company will invest £10m initially at Longbridge, assembling the TF. Although an output of around 5000 MG TFs a year is no great shakes compared with Longbridge's heyday of 200,000-plus in the 1960s and 1970s, it's a significant development for a company that many people had written off as being deader than Julius Caesar.
Of course, that doesn't take away the pain of the current Motor Show being bereft of two of our best-loved marques, but if Nanjing Automotive - in China, America, and Longbridge - and SAIC are as good as their word, then we'll be seeing a Longbridge revival in 2008.
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Longbridge production assured
MG TF confirmed for re-introduction in 2007 - and built in Longbridge.
FOLLOWING a bustling press conference in the centre of London this afternoon, Nanjing executives have finally faced the world's media, and revealed a number of its plans for the MG marque - and the headline story is that the MG TF will definitely be built in Longbridge and will be back on sale in late 2007, and the US deal announced by Oaklahoma is far from being set in concrete.
The press conference was a 'surreal' affair, with much of it being presented in Chinese, but the crux of it was to confirm much of what has been speculated in the press recently, that NAC-MG would be producing a total of 15,000 TFs in Longbridge, with an initial volume of around 4000 per year. The company confirmed that production would resume in early 2007 with sales taking off in the second half of the year.
NAC-MG's boss, Mr Yue Yang Wie confirmed that the company had major confidence in the MG brand name, and it would be pushing it hard as a global brand, although he firmly stated that the Oklahoma deal had yet to be cemented, and currently amounted to a letter of intent signed by both parties. According to NAC-MG, the Americans had jumped the gun, and the future of the Ardmore site depended on the needs of the business.
Parties already signed up to play a part in the re-birth of MG are Stadco (the producers of the MG TF body), Arup (the design consultants), XPart (the parts distribution business) and Lotus.
As widely reported, the Chinese production plant is progressing towards completion, and NAC-MG confirmed that once up and running, it would have the capability of producing 200,000 cars, 250,000 engines, and 100,00 gearboxes per annum.
Longbridge R&D Centre
A downscaled Longbridge will feature some new attractions...
The good news is that the development of Euro IV engines, previously completed by Powertrain, would be carried into production, with much of the final stages now being complete. Bulking up the European end of the operation, a UK Research and Design Centre would be set up in order to develop Euro-specific models, and there would be a sister centre in Nanjing for the domestic market cars.
Although the numbers being spoken of are small, there was much optimism that NAC-MG would get the job done. Nanjing has already recruited 57 specialists, and will hire many more once production of the TF commences, although no figures were spoken of - perhaps to ensure expectations are kept realistic.
However, the worst fears of Union leaders and local workers were all-but confirmed, as there was no announcement forthcoming that saloon car production would re-start at Longbridge. Although it was widely expected that the saloons would be a China-only proposition, it was still a blow to learn that Longbridge will become a management and R&D centre with a low production volume facility for sports cars...
In closing, Mr Wie confirmed NAC-MG's intentions to make the company great once more.
NAC-MG's boss, Mr Yue Yang Wie underlined the company's confidence in the MG name.
At a glance
· The company will now be known as NAC-MG.
· Nanjing will make an initial investment of £10m into Longbridge.
· MG TF production to resume at Longbridge in 2007, starting in low volumes of 15,000 per annum.
· The MG range will be powered by K-Series EUIV development engines.
· The American deal has yet to be agreed between the prospective joint venture partners.
· NAC-MG will be working with existing partners, Arup, XPart and Stadco, as well as new ones such as Lotus.
· There was nothing to suggest saloon production would be resuming in Longbridge.
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From Abingdon to Ardmore
SINCE MG Rover sank beneath the water we have all been staring into the pool waiting for the mud to settle and show us what life remains. Just when we think the water has cleared someone stirs it all up again. The news from Ardmore, Oklahoma has certainly done that with big talk and no answers. At least it gives us a great opportunity to wade in and have fun with our own theories.
The first thing we need to remember is that what we have heard so far is an American press release for American audiences. We should allow them to talk up MG Inc. in the States just as we expect the marque to be talked up on this side of the Atlantic pond. Once we have the London press conference out of the way on July 17th we may have a better understanding of the complete strategy, though even then it will not be the final story.
What we have to go on so far is the reality of a new factory under construction in China and wild talk of another in the US. The stateside operation sounds exciting and for this reason is a source of worry for fans of Longbridge. The gloomiest assessment seems to have come from The Times which is predicting the majority of western production going to the US. Certainly the promises of output at Longbridge have been on a downward trend but there are no indications yet that it will be the poor relation to the American site.
The work force at Ardmore is planned to be around 550 which is about the same as Lotus have on the shop floor at Hethel. Lotus capacity is for around 5000 a year yet MG Inc. is looking for up to 16,000 out of the new factory. Maybe they mean ultimate output for it will still be a tiny facility, one commentator describing it as a “shed”. By contrast Longbridge is said to be aiming for around 4000 a year, near Lotus Elise production, although theoretical capacity in the good old days was up to 25,000 a year. This 4000 figure does not make much sense next to the higher figure for the GT particularly when Longbridge appears to have retained the stamping services of Stadco while Ardmore will be assembling kits.
There have also been some suggestions that $2billion will be invested in the American operation, though it should be noted that Nanjing are not claiming that this amount is all in place right now. Whether it is or not is immaterial because it is a fanciful figure at this stage. To get all of MG up and running at full capacity will take every last cent of this sum, but this backwoods shed requires just a fraction. I think we can conclude, therefore, that the figure refers to the amounts that will be spent worldwide over the next couple of years or so, not just the US.
A more worrying development is the news about an R&D facility to be created at the University of Oklahoma. If this were to happen then it truly would be the end of the British MG, but I have my doubts that it will get that far. A full vehicle development operation needs a massive investment, dedicated facilities and highly experienced staff. None of this exists at present in Oklahoma and it would take as long to build up there as it would back in China. Meanwhile, Longbridge has this and is almost ready to go. It is said that the workforce at Longbridge will number around 1000 personnel or more.
If we assume that TF production will match GT production, and so utilises the same 500 assembly workers, then this leaves 500 left over kicking their heels. This is around the size of the previous MG Rover vehicle development strength and leads me to believe that the weight of vehicle design will take place in Longbridge. My guess is that the University of Oklahoma R&D facility will be engaged simply in federalising these designs. The actual reason for its existence is almost certainly linked contractually to the funding coming from the state. Were Oklahoma to become the world centre for MG design then we wouldn’t see another new model for up to five years, certain death for the brand.
Of course these new models are something of a mystery. The last versions of the ZR and ZT can be easily dressed up and pushed out the factory doors, but the ZS (or Rover 45) is also included in this prediction by the media. Surely Honda snatched that one back? Nanjing themselves have often mentioned that a new medium sized car is just around the corner so I can only conclude that the RDX60, or something very like it, is currently under development. Where this development is going on no one ever says, but it cannot be in Oklahoma. There is also the question of what happened to the V8 platform, Nanjing must have bought that. And what about the K Series? Surely that can be federalised, despite what critics have said.
I know that the London press conference on July 17th will make a fool out of any predictions I make, but I am going to stick my head into the muddy pool and describe what I see anyway. What will emerge is the first truly global car enterprise. The big production factory will be in China, with two small but equal sized branches in the US and UK. The Chinese side will concentrate on the saloons, hoping for ultimate output north of 400,000 a year. The US and UK will each achieve around 10,000 sports cars a year, with some saloon car assembly or production of niche versions (estates etc.) in time.
I like to think that each can achieve 50,000 a year in the long term, though they will remain branch factories. The key western market is the US so this will be the centre of expertise for marketing. This is probably just as well since foreigners seem to understand our automotive icons better than we do. Longbridge will remain as the engineering centre of expertise, though we Brits will take the perverse view that we have drawn the short straw.
Oh yes, and we will all be crying into our warm beers because Rover will finally be laid to rest.
Will all come clear on July 17th? I doubt it, but I will be there to find out.
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It's Longbridge, Nanjing and... Oklahoma
SENIOR officials of Nanjing Automobile (Group) Corporation (NAC) today announced the revival of the historic MG brand of vehicles, as well as plans to build a new MG product in Oklahoma, with the formation of MG Motors North America, Inc., in ceremonies held today in Oklahoma City.
MG vehicles will not only be built in Nanjing, China, (NAC’s home), but also at the Longbridge assembly plant near Birmingham, England and at a new American assembly plant to be built at the Ardmore Air Park in Ardmore, Oklahoma. Headquarters for MG sales, marketing and distribution (outside of Asia) will be located in Oklahoma City. Research and development will be in Norman at the University of Oklahoma.
Following the successful efforts to sustain such historically significant English automotive brands as Aston Martin by Ford Motor Company, Bentley by the Volkswagen Group, and MINI by BMW, Nanjing Motors has recruited a seasoned American auto executive, Duke T. Hale, to be the new company’s President and Chief Executive Officer responsible for the revival of MG in the U.K. and Europe followed by the re-launch of MG in North America.
“The prospect of using 25 years of executive experience at Volvo, Mazda, Isuzu and Lotus to restore MG to the automotive landscape is an opportunity I just couldn’t turn down,” said Mr. Hale. “Now that we’ve finalized the important financial, manufacturing and product planning details of this new venture, I’m well along in recruiting a team of experienced auto industry executives to join me. A key ingredient in that effort has been to find the right home to build a completely new model for a global automotive enterprise,” said Hale. “I’m confident that Oklahoma fits that description perfectly.”
Joining Mr. Hale at the announcement ceremony were two senior executives from NAC, Mr. Yu Jianwei, President, and Mr.Wang Hong Biao, Vice President.
“Nanjing Motors is fully committed to the restoration of the MG brand to markets around the world. This will be the key component of our Nanjing’s effort to join leading automakers in the manufacture and sale of high quality, high character automobiles,” said Mr. Yu Jianwei, President, NAC. “As we finalize the installation of MG assembly lines in our new Nanjing plant, we are pleased to confirm plans to build the TF roadster once again in Longbridge, U.K. and the new TF Coupe at a completely new facility in Ardmore, Oklahoma, USA. We will have even more to say about our plans during our press conference next Monday, July 17, at the London Motor Show.”
BREAKTHROUGH GLOBAL PARTNERSHIP BRINGS MORE THAN $2 BILLION IN FINANCIAL BACKING
The creation of the new MG Motors is the result of extensive planning and collaboration among a number of partners who share a common vision of putting modern MG sports cars and sedans back on the road, while extending availability of the historic English brand to new markets around the world.
Joining NAC in this effort are Oklahoma Sovereign Development, LLC; Davis Capital, LLC; the State of Oklahoma; the City of Oklahoma City; and the City of Ardmore. The collective capital investment pledged by these parties exceeds $2 billion, including NAC’s new MG plant in China, re-starting production of the roadster in Longbridge and building an assembly plant and parts distribution center in the southern Oklahoma city of Ardmore.
MODEL LINEUP WILL APPEAL TO CONSUMERS WORLDWIDE
While final details will be made available in the months ahead, MG Motors plans to offer a full range of sports cars and sedans to consumers. The three sedans will be built at Nanjing’s facilities in China, while the MG TF roadster will be built at the factory in Longbridge, U.K. A newly-designed TF Coupe (please see attached product sketch) will be built at the Oklahoma facility in Ardmore.
According to MG Motors officials, approximately 550 jobs will be created in Oklahoma, including headquarters operations, assembly operations, parts and distribution operations and research and development.
The company expects to start construction of the Ardmore assembly facility early in 2007 with production to start by the third quarter of 2008.
MG Motors North America, Inc. (MG Motors), is a joint venture with Nanjing Automobile (Group) Corporation (NAC) and will be solely responsible for the sales, service, parts and distribution of MG vehicles in the U.K., Europe and North America.
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MG makes a USA comeback?
IT looks as if the next few days are going to be a very interesting time for lovers of all things MG. With Nanjing all set to make an announcement regarding the future of the brand in London next Monday, enthusiasts are hoping that there will be a definite announcement that production will be restarting in Longbridge in the near future.
However, it looks like tomorrow will be seeing another announcement. According to whispers across the water in the USA, a company called MG Motors based in the USA will be breaking some 'sublime to ridiculous' news. Although there has been plenty of talk about the SV's future in the USA, we've been assured that tomorrow's news will be an altogether more interesting development.
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MGs may be made in the USA
THE rebirth of the MG car brand is under way, and it may include North America.
China's Nanjing Automobile Group said it will produce cars at MG Rover's historic Longbridge plant in England, closed since the collapse of MG Rover Group in 2005.
Nanjing intends shortly to announce plans for sales of MGs in the United States and even perhaps of manufacturing in North America, a source close to the venture says.
In 2005, Nanjing purchased MG Rover for £53 million, or about $97.3 million at current exchange rates.
Yu Jianwei, managing director of Nanjing, plans to outline what he hopes to achieve at the British International Motor Show in London on July 17.
Martin Hayes, Nanjing's spokesman, said: "We want to take the opportunity to bring everyone up to speed with what we have achieved so far and what our future plans are."
MG Rover collapsed in April 2005, and its assets subsequently were sold by a receiver. BMW AG owns the rights to the Rover car brand.
Nanjing, majority owned by the Nanjing government, is one of about five small Chinese automakers eager to sell vehicles in the United States.
Some analysts question whether the companies have the financial staying power and engineering expertise to sustain global sales and production. They will rely heavily on the expertise of major suppliers to meet global quality, emissions and safety standards.
MG, short for Morris Garages, got its start in 1923 building sporty versions of Morris economy cars. The first MGs came to the United States in volume in 1947 and began the British sports car craze. They were sold at U.S. dealerships until 1980.
Nanjing also plans MG production in China.
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MG to return to Longbridge
CHINESE firm Nanjing Automotive has confirmed that it is to go ahead with car production at the former MG Rover factory in Longbridge, which closed last year with the loss of around 6000 jobs.
Nanjing, which has a 33-year lease on part of the Longbridge site, will also build cars in China. The firm is believed to be keen to keep Longbridge because of the paint shop there - an expensive facility which is difficult to move. It is thought that the TF roadster is the most likely candidate for production.
The managing director of Nanjing, Yu Jianwei, is to release full details of the firm’s plans at a press conference before the British motor show later this month.
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Back on the road for Rover
Nanjing Automobile will definitely go ahead with car production at the former MG Rover car factory in Birmingham, the Chinese carmaker said, James Mackintosh reports from London.
The company will not exercise an option next month to walk away from its 33-year lease on part of Rover's Longbridge factory, a spokesman told the Financial Times.
Suppliers asked to tender for component contracts had previously been unsure whether Nanjing was committed to the UK. "We will continue the lease," a spokesman for Nanjing said. He declined to give any details of the production plans ahead of a planned announcement next month. Nanjing paid £53m last autumn for the assets of MG Rover after the company's collapse, and then spent six months searching for a partner to help restart British production before deciding to go it alone.
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Ricardo out testing again
SAIC's prototype Rover 75, the SAC528 appears to have been enjoying an outing at the Nurburgring recently, and although some commentators have been surprised by the need for disguise on this car, there do appear to be a number of bodywork changes around the rear end which may need hiding.
When he saw the images, former MG Rover homologation engineer, Nic Fasci commented: "Interesting front end on the car. The grille looks slightly different to the facelifted cars we did. That could be a tweaked front bumper. As for the back end, new bumper, new boot lid (as the Chinese wanted it in for their version) and new tail lamps with what look like boomerang LED stop lamps."
Nic added: "The Chinese didn't like the sloping back of the current 75 so their version was to have a higher waist line at the back and a higher boot. The monoside has obviously been re-tooled as has the boot to raise the profile of the rear end. Not a cheap exercise in the slightest."
As an aside, testing on a public day at the famed track is not unknown to MG Rover engineers. Nic recalled: "We did a fair amount of cars at the 'Ring, the Zed cars did some work there and also the ZT260 was honed around there." So it would seem that Ricardo's engineers are going back to what they know with SAC528.
The British consultancy Ricardo 2010 has been working closely with SAIC both in the UK and China on the productionisation of its new Rover - and currently a team of 150 former MG Rover engineers are working on the car and its production start-up, still slated for later this year...
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U-turn at Longbridge as Nanjing slashes production of sports cars
NANJING, the Chinese company which bought the collapsed MG Rover last year, has more than halved the number of cars it had pledged to make at Longbridge.
The state-owned company now plans to build only around 4000 MG TF sports cars each year at the West Midlands site, a spokeswoman said. Production could be increased if demand for the sports car was high, or cut back even further if sales failed to take off, she said. The company planned to employ 400 people at the site, but only "when we reach a certain level of production". She could not say what level of production would be needed for all those workers to be employed.
Before MG Rover went into administration last April, 6000 people worked at Longbridge.
Nanjing signed a 33-year extension to the lease on the Longbridge site with the owner, St Modwen, in February. But it inserted an option allowing it to cancel this extension in July. The company will not, as some had feared, exercise this option next month, the spokeswoman said. Nanjing's commercial director, Wang Yaoping, said in April that it planned to build between 10,000 and 12,000 cars a year at Longbridge, down from the 100,000 a year it had originally predicted when it took over the site. The figure of 10,000 to 12,000 was contingent on receiving at least £10m in British government grants.
Now Nanjing has decided not to apply for government help, resulting in the scaling back of its business plan.
Some union officials are privately sceptical of any production at all going ahead at Longbridge because Nanjing has changed its plans so many times. After the company bought MG Rover, it initially said it wanted to eventually employ 1200 workers to produce 100,000 cars a year.
It has dismantled most of the assembly lines for production of Rover cars and shipped them to China. This has added to suspicions that Nanjing is not interested in producing cars in the UK, where costs are higher.
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The political football
GLOBAL automotive manufacturers will be able to treat the UK industry like a "political football" after the demise of MG Rover, an industry expert has claimed. The collapse of the Longbridge firm has left the UK without a local champion which can hold the sector together, austin-rover.co.uk's Industry Editor, Michael Wynn-Williams said.
Even if production is restored in Birmingham by the new owners Nanjing Automobile Corporation, its future could be like Peugeot's doomed Ryton plant - kept working only as long as it is useful to its overseas masters.
This meant the production operations of Jaguar and Land Rover - both owned by Ford - could be vulnerable in the future.
The conclusions feature in a report written by Mr Wynn- Williams, who works for the automotive research company Trend Tracker. The study, The scale tourniquet and vertical joint ventures: How MG Rover was strangled examines the demise of the firm which collapsed last April.
He said: "The great tragedy of the MG Rover collapse is not simply the loss of employment, but also the destruction of the last integrated volume manufacturer in the UK. This country will continue to be the source of dazzling technical innovation which will feature in cars around the world, but the strategic role in the future of the industry will have been lost.
"Without a local champion holding the British automotive industry together multi-nationals can treat the country like a political football, shifting in functions in and out on a corporate whim. Losing this has lost the British voice in the automotive industry."
But while production may shift overseas, Mr Wynn- Williams said he thought the engineering and technical development side would remain in the Britain. He added he was pleased that NAC had shown "every intention" of returning some production to Longbridge after winning the "undignified" auction for the company.
But he retained some doubts about the long term future for the plant, saying the NAC plan would consign it to the same status as Peugeot's Ryton factory in Coventry - which the French carmaker is closing down. Mr Wynn-Williams said: "In other words Longbridge will be kept working for as long as it is useful for the global plan.
"However if Nanjing really wants to make something of the British investment and take on the global giants, then the company should also resuscitate MG Rover's engineering prowess. Designed in Britain, made in China could be the wake up call the industry needs."
Mr Wynn-Williams's study concludes that MG Rover was too small to compete on a global scale. In 2004 its final full year of production, output fell to 108,000 cars compared with 3.1 million at Honda for example. This meant higher production costs per unit and less funding available for research and development.
Mr Wynn-Williams said: "In the automotive industry economies of scale are so huge that it is said that barely six global manufacturers can survive. Hindsight tells us the MG Rover experiment was doomed since this is an industry where big is not enough; only massive will do.
"So oppressive has this morbid view been that in Britain we were blind to what we had. MG Rover had genuine capabilities, and for a brief period there were potential partners who thought so to. If the Government had known that the companies were poised to break the hegemony of the global industry they might have given the support MG Rover deserved and the British automotive industry would have kept its seat at the top table."
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Nanjing moving forwards
ALTHOUGH a timescale for the resumption of production of MGs at Longbridge remains open to debate, plans to start production of the MG ZT in China are racing ahead – with Nanjing Automotive Corporation (NAC) setting itself an ambitious March 2007 production deadline…
NAC is planning on starting serial production at this time, as it will mark the 60th anniversary of the company’s formation – and NAC sees the re-establishment of MG as instrumental in its plan to become a global player.
Currently, NAC’s plan is to build the MG 7Z (nee ZT) in its new factory in China as well as in Longbridge – assuming it can obtain financial assistance with the venture. The company is deadly serious about Chinese production, and is building a new factory to house the production tooling already shipped out of Longbridge. According to one supplier, Nanjing intends to build MG 7Zs at the rate of 85,000 a year – considerably more than Longbridge managed in its final years.
Now that Nanjing has confirmed that MG will be the main brand name for its new venture (rumours that the Austin nameplate was also going to be used seem to have died a death), it intends to make good use of its long and rich history, not to mention its army of fans. NAC intends to play-up the MG nameplate, not only to ensure acceptance in international markets, but also because NAC management is impressed by what the marque stands for.
Nanjing has already confirmed many suppliers in China and the UK are onboard, and continues to try and add more. However a number of suppliers have also signed up with Shanghai Automotive Industries Corporation (SAIC) and its rival efforts in getting its version of the Rover 75 into production. There is a race going on between SAIC and NAC to be the first to get their versions of the Rover 75/MG ZT into production, but it looks like SAIC will beat NAC to the market by at least six months.
Although many doubted NAC’s ability to reach its ambitious production target, the sheer amount of activity in China recently indicates there’s a determination within the company to make it happen. Talking recently about Nanjing's history, company president Wang Qiu Jing said: "We have lots of resources including those from MG Rover, and we welcome partners."
The mission statement is a true indicator that production plans continue, but a strategic partner would be desirable in delivering them.
In recent weeks, pre-production activity has stepped up in Nanjing – a deal with the country’s major steel supplier has been signed, and production engineers have been working flat-out to set up production presses. Panels are now being produced in China, although they look familiar enough to indicate that NAC’s design consultancy, Arup, hasn’t gone too far with its facelift for the car.
For MG Fans, the major news was appearance of Wang Yaoping, NAC (UK)’s Legal and Commercial Director, at the recent anniversary rally of enthusiasts at Longbridge. This was definite cause for optimism, just as was his assertion that production would definitely be restarting next year.
Judging by the amount of activity in China, it does indeed look like MG will be making a return in 2007 – whether any of these cars will have been built in Longbridge remains to be seen.
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SAIC spells out plans for its own brand; exports may include US market
SAIC has spelled out plans to produce its own brand of car for China and for export, possibly to the United States. The company already assembles cars for China through partnerships with General Motors and Volkswagen AG.
The first model will be a large sedan based on the Rover 75 platform. SAIC acquired the intellectual property rights to the Rover 75 and 25 platforms last year before MG Rover's collapse. Prototypes of the sedan, which will come with an automatic transmission and V-6 engine, are undergoing safety testing, says David Lindley, chief engineer of SAIC Automotive Engineering Academy. Lindley, a former MG Rover engineer, also is general manager of SAIC Motor Overseas (Europe) R&D Center in England.
Production of the sedan will begin in late 2006, and the model will be launched in 2007. Exports also will begin in 2007.
"Initially, we will target the markets which are former MG Rover markets - the United Kingdom and maybe Spain," says Andy Chen, spokesman for SAIC Motor Manufacturing Co. "In the long-term, (we will export to) the United States and Japan." SAIC Motor Manufacturing is the unit set up to manufacture and market SAIC's brand.
The second model will be a family sedan based on the same platform. It is being developed at the r&d center. At the end of the concept phase, which will be soon, development will pass to SAIC's engineering academy in Shanghai, Lindley says. As for the name, SAIC hasn't decided on one but should announce its choice by the end of June, SAIC managers say. Sources say the names "Shanghai" and "Phoenix" are being considered.
SAIC aims to introduce five product lines over the next four years, including a hybrid vehicle. More than 30 variations on the various models will be offered, SAIC says. Prices will range from 65,000 yuan to 300,000 yuan, or $8,110 to $37,500 at current exchange rates. "Our products will not be niche products," says Wang Xiaoqiu, general manager of SAIC Motor Manufacturing. "They will appeal to a wide segment of the population."
By 2010, SAIC plans to sell more than 200,000 of its own brand cars, including 50,000 exports. European sales will be through a wholly owned sales subsidiary. An overseas dealership network will be established in the second half of 2006, SAIC said without providing details. The cars will be assembled at an existing plant in Yizheng in Jiangsu province, a few hours from Shanghai. SAIC also is building a plant in the Shanghai suburbs near the Shanghai Volkswagen plant.
Total annual vehicle production capacity will reach 300,000 by 2010, and engine production capacity will hit 400,000, SAIC says. That will include the ability to produce 10,000 alternative-fuel vehicles such as hybrid and hydrogen fuel cell vehicles.
Current vehicle production capacity is 120,000, and engine production capacity is 170,000.
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Longbridge Rally springs a surprise
TO mark the first anniversary of MG Rover falling into administration last April, The Rover Community Action Trust organised a rally to the ill-fated Longbridge plant, but as well as the hundreds of enthusiasts who made the pilgrimage, were a number of very distinguished guests…
Headed by the Trust’s chairperson, Gemma Cartright, the Rally took the same form as last year’s understandably downbeat event – it was an occasion of two halves. Hundreds of enthusiasts driving an amazing selection of MG Rover themed cars convened at Longbridge’s most local motorway stop-off, Hopwood Services, its car park becoming a monument to the carmaker’s long and illustrious career.
However, as well as hundreds of members of the enthusiast community, and former factory workers, officials from Nanjing Automotive (NAC) stunned everyone by making a surprise public appearance in the service station car park. Wang Yaoping, the legal and commercial director for NAC in the UK said through an interpreter that MG cars would be manufactured in Longbridge by the same time next year.
The Chinese delegation seemed very passionate about the cars that had turned up, and the people who made the trip. They took several pictures of the cars, and were keen to see the owners to feature in the pictures also. One observer commented: “What was good was that they didn’t hurry off at all, and listened to all of the speeches, and took everything in.”
Once everyone was ready, the impressive collection of cars headed for Longbridge, where a further surprise was in order. St. Modwen Properties PLC, who own the Land and Buildings, had graciously given the Rally permission to enter the factory at Powertrain car park. As a result, hundreds of cars poured into the Powertrain car park, offering many enthusiasts their first glimpse inside the factory they all so deeply cared for…
The big news of the day was certainly that NAC had shown its human face, and won over many of the crowd who turned up on the day by publicly stating its intention to restart production. The company has recently been keen to see itself as wanting to create a future at Longbridge – and on a sunny morning in Longbridge, the first steps seem to have been taken...
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Nanjing cash plea over Longbridge
NANJING Automobile Corporation (NAC) will warn ministers that without tens of millions of pounds of government funding it will not be able to restart significant car production at the former MG Rover site at Longbridge.
It is understood that NAC will ask Alan Johnson, the Secretary of State for Trade and Industry, for between £10m and £50m in financial support when it submits its final business plan for the West Midlands site next month.
Wang Yaoping, the legal and commercial director for NAC in the UK, said that car production would still restart next year, as promised, even without government assistance. But he admitted that in this scenario NAC would have to scale back production levels and the number of workers to be employed.
"Whether the Government gives support will have influence on our plans," he said. But he confirmed he would suggest to the Government that without its support the company would not be able to employ as many people. "It will influence the amount of our activities," he said.
NAC, which bought the failed car maker MG Rover for £53m last July, needs £50m to restart production. It has already secured an unknown amount from Hong Kong banks. Mr Wang said its plan is to make, from next year, around 1,000 MG TF sports cars per month at Longbridge, employing up to 400 workers. But he admitted for the first time that this business plan assumes the Government will provide a significant amount of financial support.
Days before MG Rover went into administration, a year ago yesterday, the Government promised a bridging loan of up to £150m to try to ensure the proposed takeover by NAC's rival, Shanghai Automotive Industry Corporation (SAIC), went ahead, securing Longbridge's 6000 jobs.
Mr Wang, who made it clear that he was not threatening the Government, said: "We had the message that before MG Rover went into administration, if there was any rescue plan the Department of Trade and Industry would give the company very big financial support. Of course, we hope that the DTI will give us support.
"Our company has made a commitment to resume production here. Compared with SAIC our company has already taken one step further. If they were committed to provide financial support to SAIC why not give us some kind of support? After reviewing our business plan they should know our needs."
A spokesman for the department refused to comment on Nanjing's planned request, but he stressed: "The proposed bridging loan was an unusual situation. There was still a pos-sibility that the deal with SAIC could be done. MG Rover was still a going concern at the time."
The public spending watchdog - the National Audit Office - questioned last month whether the loan represented "sufficiently good value".
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How the mighty have fallen...
EXACTLY one year ago, the worst day in MG Rover's short and frought history manifested itself, and the company most of us know and love fell into administration, and a chapter of British automotive history came to an end.
Since that fateful day, we've all been speculating as to whether cars would actually roll off the line, and workers move back in, restoring the pride of Birmingham. It has been a long and winding road, and it seems that twelve months on, we're no closer to knowing the answer to that question...
MG Rover's new owners, Nanjing Automotive moved into Longbridge, and instantly began removing vital production components, leading many comentators to think the worst - including, it has to be said, ourselves.
But in January this year, Nanjing's UK high-up went on record as saying he had an ambition to re-start production at Longbridge, and was well aware of the strong feelings the MG marque name invokes in car buyers across the world. However, what Nanjing lacked, was the financial clout to make it happen. Getting up and running in China would be child's play in comparison...
But with over 70 per cent of Longbridge's workers re-settled in new employment is getting the factory up and running again really necessary? For some, the answer may be 'no', but Nanjing would say a 'yes' to this, even though the costs of production are much lower back in China.
But what Nanjing needs is cash to invest into Longbridge, and the race is on to find this. Without the required stipend, it'll not happen, and we'll see MG ZTs rolling off the line back in China and not in the UK - and to see how quickly Chinese production can be implemented, one only has to look at the remarkable progress of SAIC and its plan to get the Rover 75 in production in Shanghai. Within months, we'll be seeing these cars churned out in the far East...
No, one year on, the jury's still out as to whether Longbridge will see the resumption of car production - Nanjing is making noises about hiring staff in the near future, and the intel from Longbridge (what there is) seems to be positive...
This time last year, MG Rover watchers were in mourning, feeling their world had collapsed - now with 12 months' hindsight, acceptance has kicked in, and if production does restart it'll be a bonus.
If not, we'll still have our memories.
Here's to the next 12 months...
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