Brand stretch and globalisation
12th July 2006 16:18

The news that Nanjing Auto is planning an MG car assembly facility in Middle America is yet another indication of how quickly the sands of the global economy are shifting. We’re talking about a Chinese-owned company, where the production of the British-designed cars takes place, allied to a small assembly operation in Oklahoma as well as something in the UK.

I wonder what they make of it in Shanghai, where SAIC is planning on making a former MG Rover model also (a copyright row could still break out when Nanjing actually starts producing cars).

But there are signs that a serious plan is beginning to emerge from Nanjing, though more details are needed on how it will actually work.

It looks like the bedrock of the business plan is to build the cars cheaply in China, the main market – especially for the saloon cars. The photos of an empty Longbridge post-‘lift and shift’ say it all.

But there is an overseas element too. MGTF roadster will perhaps be assembled in the UK at Longbridge (where Nanjing has decided to sign the long-term lease, adding weight to the idea that it really is serious). In addition, there will be an assembly operation in the US (which reports say could focus on a TF-based coupe that never actually made it into production under the previous owners).

How would a reprised MG brand go down in the US? There is undoubtedly some brand heritage to work on. The old MGB actually didn’t do too badly in the US in the 1970s before British Leyland went and messed it up by raising ride height, failing to invest in powertrain and adding big plastic bumpers. Some enthusiasts with long memories may have a little residual respect for the MG badge. But a Chinese-owned MG brand, assembling cars in the US, with little by way of a British connection? Would that matter?

BMW can make BMWs in the US because the cars are successfully embodied with BMW values and the brand is strong enough to allow that. This MG revival plan is a very different kettle of fish.

There again, maybe if the product and price is right that won’t matter. Perhaps brand heritage won’t be played upon too heavily and the marketing emphasis will be on new and fresh, made in America too, with just a hint of where MG once came from. It could be stretching the brand a very long way, but plenty of assumptions are being challenged in this industry at the moment.

The US is one market where you can make it if the product and pricing is right; it is very receptive and open to new brands, more so than Europe is.

Anyway, there’s a Nanjing Auto press conference in London on Monday at which we should hear more detail on what is planned. But as I understand it, the announcement on what is happening in the US shouldn’t be seen as taking work away (in terms of Nanjing Auto’s plans, that is) from Longbridge.

BREAKING NEWS: US [updated 16:15pm BST] : New MG owners detail revival plan - in Oklahoma

Your Comments

I know virtually nothing about MG which I think may be an advantage for Nanjing. The Chinese company can use the British marque to "test" U.S. waters, adjusting their vehicles to the marketplace which, as Leggett states, is always open to new products. Personally I see MGs as some sort of affordable BMW: more expensive than Mazdas but less than Bimmers.
Joel A, United States

 

The whole scheme feels hugely unlikely and futile to me. Please remember that MGs have not been sold in the US since 1980, when the last of the hideously unreliable rubber-bumpered MGB series were finally euthanized. The proposed MG coupe is likely to appeal only to young women in the small-cheap-coupe market (competing against the Mitsubishi Eclipse, for example)--many of whom will never have heard of MG. Any sporting heritage will be more like half a century removed when the thing finally reaches the US market in 2010 (I think 2008 is wildly unlikely with a new marque, a new company, a new production facility, a new dealer body, etc. etc. etc.) The whole thing smacks sadly of so many ill-conceived British relaunches in this country. The Mini has been a success, but despite a clever ad campaign, most buyers neither know nor care--what they care about is that it came from their local BMW dealer. I hope I eat my words re/MG. But I very much doubt I'll have to.
John Voelcker, United States

 

The 'shifting sands' are of course reminiscent of the mocked Japanese in the 60s. Pundits have seen the latent power of Chinese producers in their homeland, but thought little of their potential for global reach beyond bottom-end, cheap cars. Grow from the bottom was the Japanese mantra and though it build solid reputations, global growth took time, still trying to conquer Europe. Nanjing et al want quicker growth and are attempting it via different strategies and have layed out a very good game-plan. MG (unlike Austin-Healey or Triumph) has had an uninterrupted history - always there; harking back to the halcyon TC, MGA and MGB days but with re-interpretation thru' MG(T)F. With amongst others Burburry re-targeting the US with perceived 'Upmarket Britishness' the time is perfect to re-introduce MG into the massive US market. As a real centre-ground alternative to the mainstream Japanese & premium German performance cars, the MG cache will win many, many hearts if the retail formula can be executed well.
Turan Ahmed, United Kingdom

 

Like this? Share it with | | | | [?] | comment on this blog