UK chancellor Gordon Brown reportedly said on Monday he was hoping for a quick deal to ensure the future of MG Rover group, which is in talks about a takeover with Chinese state-owned firm Shanghai Auto (SAIC).
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According to the Daily Telegraph, the chancellor raised the proposed tie-up with SAIC, China’s biggest car-maker, on the first day of a trip to the country. He met his counterpart, the finance minister Jin Renqing, in Beijing and afterwards told reporters he regarded joint ventures as the “way forward” for businesses throughout China.
“There is the Rover company and the Shanghai automotive company, of course, and I hope it will be brought to a conclusion soon to the benefit of the British motor industry,” he said, according to the paper.
The Daily Telegraph said the Rover deal would be a principal topic of conversation on Wednesday, when Brown meets Ma Kai, the minister in charge of the powerful National Development and Reform Commission, which has the final say, and then travels on to Shanghai as part of his three-day visit.
The paper also reported that insiders at the NDRC are said to have raised objections to the deal, saying that Rover does not have enough to offer in terms of research and development to justify the cost though Rover and Shanghai Auto both say they have been assured it has full governmental backing.
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By GlobalDataSeparately, senior Rover sources told the BBC that production is expected to start in China in 2007 ater an agreement is reached.
BBC business editor Jeff Randall was quoted on the broadcaster’s website as saying that Rover was making “optimistic noises” about the deal, adding an agreement had been reached between the two companies which could crank up production levels at Rover’s Longbridge, Birmingham, plant to levels last seen 10 years ago.
He reportedly added that a senior Rover source had told him: “We’re going to do this deal, let’s be sure about that, our lawyers are in China writing contracts now.”
Malcolm Harbour, MEP for the West Midlands and former director of marketing at Rover, told the BBC’s national Radio Five Live channel that he believes the deal is close to being finalised.
“The planning and in fact quite a lot of the implementation of that deal is already going through,” he reportedly said.
According to the BBC, he added that his former Rover colleagues had “every confidence” that the deal would be sealed, adding that a joint production plan was already in place and preparations for it were under way.
“I understand there are people from Rover working over in China in preparation for a Rover model in China,” Harbour reportedly said.
