Blog: Dave LeggettNanjing Auto and Rover

Dave Leggett | 10 August 2005

I expect I wasn’t the only one to be surprised that Nanjing Automobiles emerged as the eventual administrators’ choice in the three-way contest for the remaining assets of MG Rover. I wonder if they were surprised also and the more I hear about it, the more I’m wondering how much more is yet to unfold in the epic that is the Rover saga. Nanjing, it seems, does not just win the bid and then get on with the job. For starters, there’s the small matter of having to deal with SAIC, owner of rights to some of the cars and engines (the exact extent of which may be cause for future legal dispute).

Indeed, questions are being asked about whether Nanjing even has a strategy in place for using the assets it will acquire.

There is also an interesting backdrop in terms of regional rivalries within China. Maybe Nanjing – a minnow when set against Shanghai’s SAIC - is trying to punch heavy and move up a league. Bold move. Perhaps SAIC will be forced to cooperate with Nanjing. Or is the company positioning itself as a takeover target? ‘Nanjing is like a not very good looking girl who suddenly comes into possession of a big dowry,’ was the take from one of China’s business newspapers.

I also note that Michael Dunne of ARA (a guy whose opinion I have a lot of respect for) is saying that SAIC is the Chinese company to watch and I certainly wouldn’t argue with that. ‘Their winning move will be to have their own vehicle,’ he says. I reckon SAIC and Martin Leach’s Magma have plans for Europe in a strategic matrix that can easily bypass the Rover assets that Nanjing has ‘won’.

Incidentally, I once visited Nanjing Auto as a guest of Iveco and the charismatic early 1990s’ head – Mr Donatti, I think (I don’t have the best memory for names) - of the JV it then had making the Daily van. I recall he was an excellent host and an erudite chap who had plenty to say about philosophy as well as the business of making vehicles in China. The friendly and close-knit Italian management team had recreated a little bit of Italy on their floor of the main hotel there – they even had their own kitchen. I can still see Mr Donatti dispatching the chief engineer to the local food market for fresh vegetables. ‘We will eat a meal prepared with Chinese ingredients, but in the Italian style.’ And it was very good.


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