Nanjing Confirms MG Future. Issued July 17th 2006
Future Assured by Nanjing Automobile Group
News Agency released a news item on 12th July stating that
China's Nanjing Automobile Group, which took control of
MG Rover last year, will resume manufacture of MG-branded
cars again in 2007.
will be based at three separate locations; the now-closed
Longbridge assembly plant near Birmingham in England; at
an all-new plant to be built in Nanjing, China; and at a
third assembly plant to be built in Ardmore, Oklahoma, in
the United States.
MG brand, which was discontinued in April 2005 after financial
collapse, would first be relaunched in the UK in 2007. A
key priority will be to supply the American market, and
models are expected to start arriving in U.S. showrooms
in May or June of 2008, company executives have stated.
company said it plans to offer a full range of MG sports
cars and saloons, including its TF roadster and a new TF
Coupé. Three saloon models are earmarked for manufacture
at Nanjing's facilities in China, while the MG TF roadster
would be built at the original factory in Longbridge. An
all-new coupé version of the TF is scheduled for
the Oklahoma facility, where 500 new jobs will be created.
Hale, previously at Volvo, Mazda, Isuzu and Lotus, has been
appointed the new company's president and chief executive
officer. Nanjing has confirmed that Hale will be responsible
for the revival of the MG brand in Britain and Europe, followed
by the relaunch of MG in North America. Hale has said that
the company decided to build a U.S. plant to differentiate
itself from other Chinese automotive companies, several
of which are planning to export Chinese-manufactured vehicles
to the U.S. market. Generous tax breaks have also made manufacturing
in the United States competitive. "We may have tax
advantages in Ardmore that will allow us to build the car,
believe it or not, almost as competitively as China,"
Hale said, going on to confirm that the company plans to
export the Oklahoma-made TF Coupés to Europe.
press conference is scheduled for Monday July 24th, when
the investment plans will be unveiled by Nanjing's Managing
Director Yu Jianwei.
plans to locate its headquarters for American MG sales,
marketing and distribution in Oklahoma City, 90 miles north
of Ardmore, while research and development would be done
in Norman, near Oklahoma City, at the University of Oklahoma,
a spokesman said. Called MG Motors of North America, construction
of Nanjing's Oklahoma plant is scheduled to begin early
next year, with production starting by late 2008. Speculation
within the industry currently favours the idea that the
new coupé could be based on MG's own concept for
such a car, illustrated above. The initial capital investment
required for the American venture will be in the region
of $2 billion, with some funding from state and local governments
in Oklahoma, the state's development agency and private
Automobile Group is one of several Chinese car makers, including
Geely Automobile Holdings Ltd. and Chery Automotive Co.,
hoping to crack the global car market amid a slowdown in
demand at home. If their plans come to fruition, the opening
of a new MG plant in Oklahoma will make Nanjing the first
of these actually to progress through to assembly and manufacture
within the United States, although several others are already
investigating the export and sale of motor vehicles to the
U.S. Nanjing currently
has a small joint venture successfully up-and-running in
China with Fiat of Italy.
Automobile, one of China's oldest auto makers, surprised
the motoring world when it outbid top Chinese car maker
Shanghai Automotive Industry Corp. to buy MG Rover out of
bankruptcy for £53 million pounds in mid-2005. Earlier
this year, it took a 33-year lease on the former MG Rover
plant at Longbridge, where Transport and General Workers
Union representatives have been quick to respond to the
news that Nanjing will be making MG cars in the United States.
"There have been some concerns about Nanjing revising
its plans downwards in respect of Longbridge," said
Dave Osborne, the union's national secretary for the car
industry. "Taking these together, the T&G is calling
for an urgent meeting with the company to find out exactly
what they are now planning for car making in the UK."
contrasts somewhat with the optimism that met February's
announcement that Nanjing had signed a new lease on the
factory. At the time the deal was welcomed by the Transport
and General Workers Union (T&G), with an announcement
that Nanjing's business plan could lead to the production
of 100,000 cars a year and create 1,200 jobs. Nanjing's
UK chairman, Wang Hongbiao, said he was delighted to have
reached the deal with the site's owner, St Modwen Properties."This
means that we can move forward with our business plan to
build cars at Longbridge," he said.
lease requires that Nanjing pays about £1.8m a year
for the South Works section of MG Rover's former Longbridge
105-acre area, which includes two car assembly plants, a
paint shop and offices, accounts for about a quarter of
the old site. Richard
Burdon, the Labour MP for Birmingham Northfield, which includes
Longbridge, said people needed to understand the scale of
the deal. "We
are not talking about Rover's return here, we're not talking
about the return of mass car manufacturing," he said.
talking about a relatively small, but significant, sports
car manufacturer . . . that could lead to a broader regeneration
of the area." St
Modwen and local authorities have wider ambitions for the
Longbridge site, which would see up to 10,000 jobs created
through a mixture of housing, retail and industrial developments.
but not Rover
acquisition only included the rights to use the MG brand.
The Rover brand is still owned by Rover Group's former parent
BMW, and the Rover marque is now for sale. It is believed
that Ford will be given first refusal to buy the marque,
under an agreement entered into when the American car maker
acquired Land Rover from BMW in 2000.
Reuters items on 12th
July 2007 and 17th