The British media have been rather negative about a few things in the wake of Nanjing Automobile Corp.’s announcement that MG will resume production. The main concern is, rightly, from the UK Transport & General Workers’ Union, since members have found it hard getting new jobs since May 2005: does an Oklahoma factory mean fewer potential jobs at Longbridge? The answer seems to be yes as NAC revised its production forecast for Longbridge downward.
   In their negativity, a few other pertinent facts have been omitted. The MG TF was never sold Stateside, and I am not sure if it was just because MG lacked a dealer network there. The engines, for a start, were not Federalized. Secondly, will the TF and 75 saloon pass NHTSA safety tests? Thirdly, my good mechanic friend, Stephen Hamilton, says the TF was basically a basket case in terms of build quality, so the Nanjing, Longbridge and Oklahoma plants have their work cut out. No one will buy an MG that leaks any more.
   There remains the question of rival MG Rover producer Shanghai Automotive Industry Corp., which has intellectual property rights to the 25 and 75 models in a separate deal. To be on the safe side, SAIC is developing its 75 model off a long-wheelbase platform, and last month a revised model was seen testing at the Nürburgring. The revised model looks newer and fresher than what NAC might build, which, to my knowledge, is a facsimile of what finished production in England last year.
   A reasonable option would be for Nanjing to produce MGs and SAIC to produce Rovers, but the two companies might not see a friendly, sensible division as a way forward. It will also depend on securing rights to the name: Rover’s brand is owned by BMW, though the Bavarians are happy to talk turkey. MG’s is probably owned, at least in some European countries, by a Dutch concern.
   The ultimate decision on how to divide production and the brands may be down to Red China’s competition agency, the National Development and Reform Commission (NDRC), who could well see sense in the two marques battling it out to maximize profits—and, of course, the influence of the motherland. This one major political consideration is consistently overlooked—China isn’t all about market forces.
   SAIC is restructuring itself into an even bigger monster back in Shanghai, on the local share market, and with new backing, it could potentially keep NAC a niche player of sports cars and warmed-over sports saloons.
   Still, support from MG-philes has been strong. After all, MG has returned because of the enthusiasm of a small Chinese company. This is not a faceless behemoth. It sounds more like a bunch of guys who could have been quite happy making Fiat Palios and Seat Ibiza Mk I knock-offs for the local market, but who loved cars enough to give this venture a go. That, in itself, should be applauded, even if I have some concerns about NAC’s capitalization and its way of leaking information to the media.
   Let’s hope NAC’s Monday announcement will bring some needed transparency to the table, because being “one” with its audiences is the greatest weapon a small company has against the likes of SAIC in 2006. NAC can be cleverer and outsmart its rival: the question is whether it has the will to do so and move to a brand orientation.

Del.icio.us tags: MG MG Rover cars NAC SAIC Red China Politburo China Posted by Jack Yan, 02:45  permalink

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