Nanjing Automotive Corporation (NAC) has set out its initial plans to revive the MG brand and return low-volume car production to the Longbridge site in the UK’s West Midlands.
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But the Chinese firm’s bid to pick up the pieces following MG Rover’s collapse last year still looks like a risky business venture.
Many British journalists remain unconvinced that a manufacturing strategy for Longbridge that is heavily reliant upon the MG roadster model that debuted in 1995 can really succeed.
Mr Yu Jianwei, President of NAC, revealed just ahead of the London Motor Show that NAC would be making an initial investment of GBP10m in the part of the Longbridge site it has secured on a long term, 33-year lease.
NAC MG (UK) intends to start production of the two seat, mid-engined roadster, the MG TF, from first half of 2007 and commercially launch in second half of 2007. NAC says it has upgraded the powertrain to make it Euro 4 compliant, now mandatory for European market sales (under MG Rover it was Euro 3).
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By GlobalDataMr Yu said the firm would begin work on the basis of annual production capacity of 15,000 cars. The cars will primarily be sold in the UK and Europe but may be exported to other markets too, NAC claims.
NAC-MG (UK) also says it is now beginning the work needed to put in place a nationwide retailer network in Britain. Yu said that he believed former MG Rover dealers would want to sell the new MG models.
Mr Yu also said that in 2008 it is expected that sales of the Chinese-made MG ZT range will resume in the UK. All of these models will offer ‘significant enhancements compared to the previous MG Rover produced cars’. Chinese consumers will be offered both models and will also be able to buy the MG ZR range.
NAC plans a new centralised production facility in Nanjing (under construction) with annual production capacity of 250,000 vehicles and 250,000 engines with low-cost CKD kits shipped overseas for assembly.
NAC MG is also re-establishing an R&D Centre at Longbridge and this, coupled with output from a similar centre in Nanjing, will shortly be working on completely new models which NAC says it will launch in the future.
NAC itself acknowledges that there remains uncertainty about future MG production levels outside of China and exactly who produces/assembles what. Indeed, Mr Yu stressed that last week’s announcements about an assembly facility in Oklahoma (click here for news item) amounted to a ‘letter of intent only’.
As far as jobs created in the UK are concerned, Mr Yu said that 57 [mainly management] jobs had been created so far, with more to follow when assembly starts and provided the MG cars do well in the market. It could be ‘two or three times current levels,’ he said.
But for those looking for bigger positives, Mr Yu was adamant that the internationalisation strategy for NAC is being built around the opportunity that the MG brand revitalisation project offers. And NAC certainly hasn’t gone for a widely speculated quick deal with SAIC (a much bigger firm and a failed bidder on MG Rover assets; SAIC may be in copyright disputes with NAC when NAC starts production of some models – not MG TF).
It just may be serious and, to be fair, any firm in NAC’s position right now would struggle to provide certainties. Job creation and future output levels are difficult to predict at the best of times.
Much depends on how, in the first instance, the consumer will take to the reprised MG TF. And there’s the slight rub. It could be just the ticket for China, but in Britain it’s hard to see people (potential customers or dealers) getting crushed in the stampede.
Dave Leggett
