An MG Rover official at the company’s head office in Birmingham, central England, says that it is “monitoring” rather than reviewing its alliance with China Brilliance Industrial Holdings.

MG Rover group public relations director Stewart McKee told just-auto that the alliance is with an affiliate of China Brilliance Automotive.

“It’s not a holding company. We’re keeping a watchful eye on it, not reviewing it.”

McKee was commenting on an Automotive News Europe (ANE) story published this week which, citing “sources in China” reported that MG Rover’s joint venture in the country “is probably doomed”.

ANE said the Chinese joint venture is key to the British independent manufacturer’s future product plans but is in danger of falling victim to China Brilliance’s problems following the departure of company founder Yang Rong.

But McKee told just-auto that MG Rover “still has a deal” with China Brilliance Industrial Holdings and its chairman Yang Rong.

The first project of the joint venture, McKee said, was “production of the “medium sized car”.

That, McKee claimed, was “proceeding according to schedule” though it was still “some way off”.

A China Brilliance official, who declined to be identified, told Automotive News Europe: “We are contacting MG Rover and want to talk with them on a high level about the future of the two companies. We have not had a chance to meet with them yet.”

ANE said the official declined further comment but stressed that MG Rover had a deal with an affiliate – China Brilliance Industrial Holdings – and not with China Brilliance itself.

China Brilliance is known for the complexity of its corporate structure, with numerous affiliates and subsidiaries, ANE said.

A financial analyst who follows China Brilliance told Automotive News Europe that the company’s new management is pushing to simplify its investments following Yang’s departure in June following allegations of financial wrongdoing.
ANE said that China Brilliance and its affiliates have joint ventures with BMW, General Motors and Toyota.

The official told ANE that China Brilliance officials had in turn indicated to him they would probably terminate the MG Rover venture as part of an effort to reduce commitments.

Another Asian source told ANE that the team heading up the Chinese side of the joint venture including the head, Brian X. Sun had either been disbanded or was in the process of being disbanded.

ANE said that MG Rover chief executive, interviewed at the recent Birmingham motor show had said he remains hopeful: “We still have a deal with China Brilliance.”

That view was repeated today to just-auto by MG Rover spokesman McKee.

Garel Rhys, director of the Centre for Automotive Research at Cardiff University in Wales, who has offered advice to MG Rover, told Automotive News Europe: “China Brilliance is still sending the cheques over for research work.”

According to ANE, HOWE recently downplayed the importance of the Chinese joint venture. He reportedly said most of the medium sized car’s development was already done by the time talks with China Brilliance started.

The Chinese would benefit most from getting the developed car ready for manufacture and sale in their country, ANE added.

But ANE, citing Rhys, said the importance of the alliance has more to do with vehicles beyond the lower-medium 45, especially the replacement for the current 25.

“If [the venture] doesn’t work, that takes a major plank away from the strategy and they would be back to square one on their strategy after the 45,” Rhys told Automotive News Europe.